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The University of Phoenix, one of the largest for-profit colleges in the U.S., faced charges from the Federal Trade Commission (FTC), alleging that the school harmed students through deceptive advertising, including promises of employment opportunities that the FTC claims were false or overblown. In response, the school agreed to a $191 million settlement to bring an end to these claims.
Some of the money — $50 million — is a cash settlement, but the remaining $141 million is earmarked to cancel student debt for University of Phoenix students who were harmed by the deceptive advertising, according to the FTC.
If you took out federal or private student loans for University of Phoenix classes, you may be eligible to join a class action lawsuit investigation and pursue compensation.
What Employment Promises Were Made for Graduates of a Degree From University of Phoenix?
According to a press release from the FTC, through false advertising in television and radio ads, many students had been promised that a degree from the University of Phoenix would give them valuable connections with major corporations, including AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross. These ads, according to the FTC, gave the false impression that the school worked with these and other companies to create job opportunities specifically for University of Phoenix students.
The FTC’s lawsuit additionally alleged that the University of Phoenix campaign also gave the false impression to prospective students that the school worked with these and other companies to develop curriculum, creating specific courses at the University for students to take that would prepare them for the jobs that were waiting for them at these companies.
In one of these ads, logos of major companies appear on the screen as a narrator says, “at University of Phoenix, we’re working with a growing list of almost 2,000 corporate partners, companies like Microsoft, American Red Cross, and Adobe, to create options for you.” The campaign ran from late 2012 to early 2014, during the period when the school was still owned by Apollo Education, before both were purchased by private investors in 2016.
The FTC argued that the University of Phoenix had not partnered with these companies, simply used their names and brand recognition to lure prospective students to enroll with false promises of what enrollment would get them.
The University of Phoenix’s ad campaign allegedly targeted certain vulnerable groups in particular, according to Forbes: people of color and military veterans.
The settlement was a major achievement for the FTC, and set an agency record.
“This is the largest settlement the Commission has obtained in a case against a for-profit school,” noted Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist.”
Why Are Student Loans for University of Phoenix Being Cancelled?
The FTC’s investigation into the University of Phoenix began in 2015. The agency found that some of the school’s advertising to prospective students was deceptive, touting relationships and job opportunities with major companies in a way that falsely promised jobs with a degree from University of Phoenix.
Now, $141 million of the settlement agreement is set to be used to cancel student debt for University of Phoenix students.
An FTC commissioner, Rohit Chopra, noted on Twitter that the “action against University of Phoenix and future actions against scam schools will set the stage for canceling more student debt and terminating bad-actor access to valuable government benefits.”
Unfortunately, while this is a record settlement amount, it is still a “drop in the bucket in terms of the total amount of debt that these borrowers owe,” Seth Frotman, executive director of the nonprofit advocacy group Student Borrower Protection Center, told NBC News. “I think what this case demonstrates is the deep systemic problems that continue to exist in the student loan market and in particular around predatory for-profit schools.
Indeed, in 2018, nearly 100,000 students were enrolled with University of Phoenix, a primarily online institution. At one point, the school had nearly 500,000 students enrolled, though critics said that this rapid growth sacrificed academic integrity and lowered the educational standard of the school, according to a Senate report.
The University of Phoenix maintains that the settlement agreement was over “a single advertisement campaign that ran from late 2012 to early 2014 and occurred under prior ownership.” The university maintains that it “acted appropriately,” but says the settlement agreement will allow the institution and its students to move on.
“This settlement agreement will enable us to maintain focus on our core mission of improving the lives of students through career-relevant higher education, and to avoid any further distraction from serving students that could have resulted from protracted litigation, as well as the time and expense of the litigation itself,” the university said in a statement.
Are You Eligible for University of Phoenix Loan Forgiveness?
Are You Eligible for University of Phoenix Loan Forgiveness?Students who were enrolled in the University of Phoenix between October 1, 2012, and December 31, 2016, can expect their outstanding balances with the university specifically to be automatically forgiven. According to the FTC, these students do not need to contact the school or the commission to set their University of Phoenix debt forgiveness in motion. The school will be sending letters and emails to eligible borrowers informing them they no longer owe school payments.
However, the settlement does not include federal and private loan obligations. Indeed, student loans for University of Phoenix students have not been forgiven with the settlement — just debt with the school itself.
Loan forgiveness under the Trump administration and Education Secretary Betsy DeVos has been limited. On the same day as the FTC’s enforcement action against the University of Phoenix, Secretary DeVos announced her department’s alternate approach to loan forgiveness from the Borrower Defense to Repayment rule that had been adopted under the Obama Administration. Secretary DeVos’s plan will limit loan forgiveness to only partial amounts, to be determined by a formula.
“While Education Secretary Betsy DeVos continues to make it easier for predatory education companies to recruit and rip off students, the FTC has proven that they have the backs of the borrowers of their families,” said Whitney Barkley-Denney, a senior policy counsel with the Center for Responsible Lending (CRL), according to The Chicago Crusader. “The students defrauded by the University of Phoenix deserve nothing less than full loan forgiveness from the Department.”
If you were a student, you may be eligible for University of Phoenix loan forgiveness through a class action lawsuit.
How to Join a University of Phoenix Lawsuit
If you were enrolled between October 1, 2012, and December 31, 2016, and had outstanding debts with the university itself, these debts should automatically be forgiven. But if you have taken out student loans for University of Phoenix classes, either federal or private, the settlement does not cover these loans.
Students who are residents of Texas or California that were misled by the University of Phoenix’s alleged false advertising regarding job opportunities for graduates, and did not get a job in their field after graduation, may be able to join a class action lawsuit investigation.
Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork for you by connecting you with an experienced attorney. Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.
Join a Free University of Phoenix Class Action Lawsuit Investigation
If you are a Texas or California resident and were misled by University of Phoenix’s representations about job prospects, and did not get a job in your field of study after graduation, you may be eligible to join a FREE University of Phoenix lawsuit investigation.
This article is not legal advice. It is presented
for informational purposes only.
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64 thoughts onWhy Are Some Student Loans for University of Phoenix Being Cancelled?
I live in Arkansas and UOP stated they network with many different companies. Once I graduated with their degree, I would have a good chance of getting a job with one of the companies. After, graduation I started applying for jobs with the companies they network with and local companies within my states. Most companies didn’t even acknowledge University of Phoenix degree. I called and spoke with an advisor at university of Phoenix she advised me I may have to move out of state. I advised her that UOP recruiter advised me wrong when she recruited me. I owed a 100,000 loan with a minimum wage income.
I graduated from UOP in 2009. I’m currently working as a substitute teacher making 35,000 owe more than I ever expected to.
i also attended this horrible college i enrolled 2008-2011 i owe over 98,000 for a bachelors degree. i never benefited from this degree like they said i would they never helped me find a job i wanted to be added to the law suit
i also attended this horrible college i enrolled 2008-2011 i owe over 98,000 for a bachelors degree. i never benefited from this degree like they said i would they never helped me find a job i wanted to be added to the law suit also
I started in 2010. I was told I would get a job after completing my degree. I was told I would be finished in no time. I graduated in 2014 with a degree in teaching. It’s now 2021 and my resume and degree have been on my states teaching website and I have not received any requests for interviews or jobs. I even applied for an aide position and a lunchroom position. However, several people had there loans forgiven for this same reason but since mine are federal or direct loans mine dont count. I would gladly participate in sueing the u.s. department of education for the balance I owe from going there. I’m still in school somewhere else because I couldn’t get a job.
UOP lied and promised a job upon graduation in an effort to boost enrollment from 2012 to 2016 with participating programs in design, computer science, business, and the sciences, including environmental science, but did not give job placement upon graduation as promised. It’s fraud. Anyone enrolled during the time frame and in the participating affected programs has the right to compensation and to have student debt associated with UOPs attendance and cost of living while studying to be compensated, and we should also be compensated for our time.
UOP promised that I would be able to teach a class. But then when I went to talk to my counselor I was told that was no true. And I was told I wasted my time
I attend University of Phoenix May 2005 and February 2011 received bachelor and Masters degrees with a bill of 130k of student loans. I can can afford to pay this back. Being misled by this school in enrollment and financial aid. I never receive one phone call to assist me finding a better job or any help help. My current job don’t even recognize this school. I am single parent trying to make it. This how schools prey on people to fatten there pockets and we left with the BILL. I need help get this LOAN WRITTEN OFF.
Pamela,
I attended Grand Canyon University for 3 classes right before transferring to the University of Phoenix in 2009-11 for a BS degree. I am 110,000 in debt, total. I have found out that GCU took out private loans, WITHOUT my knowledge OR consent. What is wrong with these people…Oh and I did not finish because I hit my Aggregate limited, really! When I call, or email I get transferred to someone else and the run around and lies, lies, lies.
I am an online graduate from UOPX myself. I went back to school late. I was 40 and my mother became terminal with 4th stage lung cancer so I put my work life on hold to be there for her care 24/7.
My career of choice was caring for adults with disabilities which I did for 21 enjoyable years’ and so when signing up for classes with UOPX I started out with wanting my degree in Healthcare Administration with a focus on Health Care Management . I enrolled for this degree program and my first day of class was on 4/13/2013
15 months later, my mother passed away. In that time I provided all of my moms care and attended all of her doctors appointments , radiology and chemo appointments. . I got a real in depth view of how the other side works within the healthcare setting and did not agree with they way they practiced, behaved or carried themselves. In turn, the education I was currently trying to obtain held a big possibility of putting me in these types of situations and environments and so, because I did not agree with any of it, I switched my career path. I told there were only 2 options that I had which coaligned with the associates degree I had recently obtained the first one being IT with an undergraduate certificate in cybersecurity or criminal justice. IT would allow me to still graduate with my BS around the same time where the criminal justice would add another year because I would require additional classes that ran at an associates level that I didn’t complete Having to care for my mom and watching her deteriorate as I still plugged away at my education was a very hard thing to do, so, for fear I would not want to complete the additional year and drop out, I selected the IT education and graduated with my BSIT/ACS on 4/30/2018.
My issue with the way things went in regards to the career path switch was that my advisor never told me that after I graduated I would still require additional training, education and certificates before anyone in the IT field would look at me. I was under the impression that once I graduated I would be earning big money. I figured well, at least I will be earning the big money to be paying off the big loan I had accumulated (98,000 total).
I was misled by the advisor because her lack of providing me with the full picture of what I will need to do and be financially responsible for. Had I have known I would still have to work mediocre jobs and save little bits of money here and there to try and save enough for the extra knowledge i would require following my graduation, I might of changed my mind and went with criminal justice.
I don’t even have past experience to go on because I was in healthcare, so I wonder if even striving to get the money saved up for the extra certification will do me any good? I feel like those 5 years were all for nothing because the struggles I have had since graduating with getting a job probably wont end because i will still lack in experience. UOPX definitely needs to work on being transparent with the students they enroll. As each enrollee lines their pockets with money, each graduating scholar is still in life’s real struggles because of them!
I “received” a doctorate in 2016 from this horrible institution. Besides a degree that I refuse to put on my resume from this rip-off business, I also owe more than $100K. I’m so embarrassed that I was sucked into this mess and won’t use the title of Dr. with my name. I earned my undergraduate and graduate degrees from very well-known traditional institutions, and made the biggest and most expensive mistake of my life by associating with UoP! I thought marrying my “ex” was my biggest mistake in life, but UoP is the recipient of the “Biggest Mistake Ever Made Award.”
I did not receive any notification stated I would receive loan forgiveness for school year 2011-2015 from Phoenix University nor a check.