- Biden administration clears $37M student debt for 1,200 University of Phoenix attendees.
- Accusations fly: University’s flashy ad campaigns allegedly misled students about job prospects.
- Refunds inbound: Impacted students to receive reimbursements on their payments come October.
In a refreshing turn of events, the Biden administration has decided to wave the financial wand and erase nearly $37 million of student debt. This relief touches the lives of over 1,200 students from the University of Phoenix. If you're wondering how this came to be, students who had pleaded their cases between September 21, 2012, and December 31, 2014, under the borrower defense program are the lucky recipients. This program is designed for those who believe their colleges pulled the wool over their eyes, leading them into debt-traps.
The University of Phoenix might have dazzled potential students with flashy national ads. These ads played up the notion that partnering with the institution would skyrocket one’s career potential, courtesy of the university's supposed partnerships with numerous big-name corporations. Richard Cordray, donning the hat of the federal student aid chief operating officer, didn't mince his words. He openly criticized the university, stating that students were lured in with deceptive advertisements, only to be handed over hefty debts and degrees with little to no value.
Where was the University of Phoenix's side of the story, you ask? Well, they kept mum, choosing not to comment on the unfolding drama. Meanwhile, the Federal Trade Commission chimed in, revealing their investigative findings from a previous probe into the university's practices. This resulted in a cool $191 million settlement back in 2019. From internal mails to recorded calls, the evidence was overwhelming. The cherry on top? A senior VP from the university describing their advertising methods as "smoke & mirrors".
Now, if you're one of these borrowers, keep your eyes peeled for a notification come early October. Any payments you've made are set to be reimbursed, and lingering loan balances will vanish into thin air. Here’s a fun tidbit - the University of Phoenix's borrowing rates are sky-high, with students borrowing a whopping $484 million in just the 2022-2023 academic year. For some perspective, under Biden's leadership, more than $117 billion of student debt has been dissolved, benefiting a staggering 3.4 million borrowers.
Lastly, while President Biden’s initial grand plan of wiping out up to $20,000 of student debt for a large swath of Americans hit a roadblock in the Supreme Court, he’s not backing down. He's on the hunt for another avenue to bring financial relief to students, though the upcoming version might cater to a more select crowd.
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