President Biden announced on Wednesday that he is canceling $37 million in debt for more than 1,000 borrowers who attended the University of Phoenix, a prominent online college. According to Mr. Biden, these borrowers were deceived into believing that their enrollment would lead to promising careers at Fortune 500 companies, but those benefits never materialized.
In its review of the University of Phoenix, the Department of Education found a national campaign that advertised partnerships with Fortune 500 companies and preferential hiring opportunities but provided no real benefits to the enrollees. This debt relief applies to those who were enrolled between September 21, 2012, and December 31, 2014, and follows a Federal Trade Commission (FTC) investigation into the University of Phoenix, which resulted in a $191 million settlement in 2019.
The Federal Student Aid Chief Operating Officer, Richard Cordray, stated that the University of Phoenix deceived prospective students with false advertisements, leading them to enroll and accumulate significant debt without any useful degrees. The Biden administration aims to hold colleges accountable for taking advantage of hardworking students and borrowers.
President Biden has made student debt relief a key issue, citing the high cost of college and the need for relief among young Americans. Critics argue that this approach panders to young voters and unfairly requires blue-collar workers to subsidize the education of college graduates through their tax dollars.
In addition to the debt relief for University of Phoenix borrowers, Mr. Biden highlighted his approval of more than $117 billion in debt relief for over 3.4 million borrowers. This includes more than $14 billion for more than 1 million borrowers affected by colleges that took advantage of them or closed abruptly.
While a major plan to erase significant amounts of student loan debt encountered obstacles in Congress and the courts, President Biden recently introduced the SAVE income-driven plan. This program calculates loan payments based on a borrower’s income and family size and forgives any remaining balances after a certain number of years.
The Biden administration remains committed to addressing the issue of student debt and providing relief to borrowers.
