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 announced today that its enforcement action against the University of Phoenix continues to help students deceived by the for-profit university, as the U.S. Department of Education will forgive nearly $37 million in federal loans  for more than 1,200 students affected by the school’s deceptive practices, based in part on the FTC’s 2019 case.

“Students deceived by the University of Phoenix deserve strong relief, and today’s action is an important step forward,” said Samuel Levine, Director of FTC’s Bureau of Consumer Protection. “We will continue to work with our state and federal partners to protect students.”

“The University of Phoenix brazenly deceived prospective students with false ads to get them to enroll,” said Federal Student Aid Chief Operating Officer Richard Cordray. “Students who trusted the school and wanted to better their lives through education ended up with mounds of debt and useless degrees. Today’s announcement builds on the FTC’s work to provide relief to those affected by Phoenix’s misconduct and delivers on the Biden-Harris Administration’s mission to support student loan borrowers.”

According to the 2019 FTC complaint, University of Phoenix, and its parent company, Apollo Education Group, Inc., falsely claimed that their relationships with top companies created job opportunities specifically for University of Phoenix students and that they worked with these companies to develop their curriculum. The FTC charged that the companies used a multimedia ad campaign to attract students, including ads specifically targeted to military and Latino consumers. The companies’ “Let’s Get to Work” campaign featured several high-profile employers, including Microsoft, Twitter, Adobe, and Yahoo!, giving the false impression that University of Phoenix worked with those companies to create job opportunities for its students.

Today’s announcement by the U.S. Department of Education builds on the FTC’s prior federal court order against the University of Phoenix. As part of the record $191 million action, the school was ordered to pay $50 million to the FTC to make payments to former students and cancel $141 million in private student debt owed directly to the school. The order also prohibits the companies from further deceptive business practices.  In March 2021, the FTC sent payments to eligible University of Phoenix students, which resulted in more than $45.6 million in relief. The FTC sent additional payments totaling more than $3.6 million to 130,652 people who cashed their first payment.

The U.S. Department of Education announced that it will approve federal student loan forgiveness for people who attended the University of Phoenix, were deceived by the school’s job placement claims, and submitted a valid application for borrower defense. The agency is continuing to process new and existing applications. All borrowers with approved claims will receive full loan forgiveness. People interested in submitting a claim for loan forgiveness, should visit the Department of Education’s Borrower Defense Loan Discharge informational page.