FTC Action Leads to $37 Million Loan Forgiveness for University of Phoenix Students

FTC Action Leads U.S. Dept. of Education to Forgive Nearly $37 Million in Loans for Students Deceived by University of Phoenix

The U.S. Department of Education will forgive nearly $37 million in federal loans for more than 1,200 students affected by the deceptive practices of the University of Phoenix.

The Federal Trade Commission’s 2019 case against the for-profit university played a crucial role in securing relief for the deceived students.

The University of Phoenix falsely claimed relationships with top companies, creating the impression of job opportunities for its students.

The FTC’s enforcement action resulted in a record $191 million settlement, with the school ordered to pay $50 million to the FTC and cancel $141 million in private student debt.

FTC Action Leads U.S. Dept. of Education to Forgive Nearly $37 Million in Loans for Students Deceived by University of Phoenix

The Federal Trade Commission’s enforcement action against the University of Phoenix continues to benefit students who were deceived by the for-profit institution. The U.S. Department of Education has announced that it will forgive nearly $37 million in federal loans for over 1,200 affected students. This development is a significant step forward in providing relief to those who trusted the University of Phoenix but ended up with debt and useless degrees.

Deceptive Practices and False Claims

The University of Phoenix and its parent company, Apollo Education Group, Inc., were found to have engaged in deceptive practices. They falsely claimed that their relationships with top companies resulted in job opportunities specifically for University of Phoenix students. The companies used a multimedia ad campaign, targeting military and Latino consumers, to attract students. The ads featured high-profile employers like Microsoft, Twitter, Adobe, and Yahoo!, giving the false impression that the University of Phoenix collaborated with these companies to create job opportunities for its students.

Record Settlement and Relief

The FTC’s enforcement action led to a record $191 million settlement, with significant consequences for the University of Phoenix. As part of the settlement, the school was ordered to pay $50 million to the FTC, which would be used to make payments to former students. Additionally, $141 million in private student debt owed directly to the school was canceled. The settlement also included a prohibition on further deceptive business practices by the University of Phoenix.

To end, this action by the U.S. Department of Education, based on the FTC’s case, demonstrates the commitment to support student loan borrowers and provide relief to those affected by the University of Phoenix’s misconduct. The collaboration between federal agencies aims to protect students and hold institutions accountable for their deceptive practices.

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