Last Updated on September 21, 2023 by Robert C. Hoopes
Biden Administration Cancels $37 Million in Student Loan Debt for University of Phoenix Borrowers
In a major move aimed at relieving the burden of student loan debt, the Biden administration has canceled $37 million of federal student loan debt for over 1,200 borrowers who attended the University of Phoenix. The cancellation comes as a result of the administration’s finding that the for-profit school misled students about their job prospects.
This announcement is part of the administration’s narrower approach to student debt forgiveness, after its broader student loan forgiveness program was blocked by the Supreme Court. The Department of Education also canceled $72 million in federal student loan debt for over 2,300 borrowers who attended the for-profit Ashford University back in August.
With these recent cancellations, the total amount of federal student loan debt canceled by the administration since 2021 now stands at over $117 billion, out of the nearly $1.7 trillion outstanding debt. This move represents a significant step towards addressing the long-standing issue of student loan debt in the country.
The University of Phoenix borrowers who are now eligible for debt relief were enrolled between September 21, 2012, and December 31, 2014, and had applied for loan forgiveness under the borrower defense to repayment program. The Department of Education found that the University of Phoenix falsely represented its partnerships with corporations, including Fortune 500 companies, in terms of offering hiring preferences to students.
It is worth noting that the settlement agreement reached between the University of Phoenix and the Federal Trade Commission (FTC) in 2019 over similar claims did not admit to any wrongdoing. However, the government’s recent findings prompted the Biden administration to take action and provide relief to the affected borrowers.
The University of Phoenix has refuted the government’s findings and intends to challenge the allegations. The institution stands by its commitment to providing quality education and support to its students.
Eligible borrowers will be notified of their debt relief approval by early October, and their loans will be put in forbearance until officially canceled. Importantly, borrowers in forbearance will not be required to make payments, even after the pandemic-related freeze on federal student loan payments ends in October.
For other former University of Phoenix students who believe they were similarly affected during the specified years, there is still an opportunity to apply for student debt relief under the borrower defense program.
In addition to these debt cancellation efforts, the Biden administration has implemented measures to make it easier for borrowers to apply for federal student loan forgiveness through existing programs. This includes expanding eligibility for the Public Service Loan Forgiveness program and launching the income-driven repayment plan known as SAVE.
As this story continues to develop, updates may provide additional information and developments on the issue of student loan debt and the actions taken by the Biden administration to address this pressing concern.