Why Are Some Student Loans for University of Phoenix Being Cancelled? 

The Department of Education has cancelled the student loans for University of Phoenix. The move is part of a larger effort to crack down on fraud and misrepresentation in postsecondary education, but it also highlights a problem with how federal lending programs are set up today: enrollment promises don’t always translate to results.

The “university of phoenix student loan refund” is a question that has been brought up in many different places. The University of Phoenix is cancelling some student loans for students who attended the school between 2006 and 2010.


The Federal Trade Commission (FTC) filed charges against the University of Phoenix, one of the largest for-profit colleges in the United States, alleging that the school harmed students through deceptive advertising, including promises of job opportunities that the FTC claims were false or exaggerated. As a result, the institution agreed to a $191 million deal to terminate the lawsuits.

According to the FTC, some of the money — $50 million — will be paid in cash, while the rest $141 million will be used to erase student debt for University of Phoenix students who were injured by misleading advertising.

You may be able to join a class action lawsuit inquiry and seek compensation if you took out federal or private student loans for University of Phoenix courses.

What Employment Promises Have Been Made for University of Phoenix Graduates?

According to a press release from the Federal Trade Commission, many students were promised that a degree from the University of Phoenix would provide them with valuable connections with major corporations such as AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross through false advertising on television and radio ads. According to the FTC, these advertisements created the misleading impression that the university collaborated with these and other businesses to generate employment opportunities especially for University of Phoenix students.


According to the FTC’s lawsuit, the University of Phoenix campaign also gave prospective students the false impression that the school collaborated 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 these companies were offering.

“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,” a narrator says in one of the ads, which ran from late 2012 to early 2014, when the school was still owned by Apollo Education.

The FTC said that the University of Phoenix had not collaborated with these businesses, but rather exploited their names and brand awareness to entice potential students to join by making misleading claims about what they would receive if they enrolled.

According to Forbes, the University of Phoenix’s marketing campaign reportedly targeted vulnerable populations such as persons of color and war veterans.

The settlement was a major victory for the FTC, and it set a new record for the agency.


Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, said, “This is the biggest settlement the Commission has achieved in a lawsuit against a for-profit school.” “Students who are making critical educational choices need facts, not phantom career possibilities that do not exist.”

Why are University of Phoenix student loans being cancelled?

The Federal Trade Commission started looking into the University of Phoenix in 2015. The agency discovered that part of the school’s advertising to potential students was misleading, boasting about connections and employment possibilities with large corporations in a manner that falsely promised jobs with a University of Phoenix degree.

The settlement deal will now be utilized to erase $141 million in student debt for University of Phoenix students.

The “action against University of Phoenix and future actions against scam schools will lay the groundwork for canceling additional student debt and terminating bad-actor access to important government benefits,” according to FTC commissioner Rohit Chopra.

Unfortunately, although this is a record settlement amount, it is still a “drop in the bucket” when compared to the overall amount of debt owed by these borrowers, according to Seth Frotman, executive director of the nonprofit advocacy organization Student Borrower Protection Center. “I believe this case illustrates the underlying structural issues that persist in the student loan industry, particularly in the area of predatory for-profit colleges.


In fact, University of Phoenix, a mainly online school, has over 100,000 students enrolled in 2018. According to a Senate investigation, the school had over 500,000 students enrolled at one time, but opponents said that this fast expansion jeopardized academic integrity and reduced the educational quality of the institution.

The settlement deal was over “a single advertising campaign that lasted from late 2012 to early 2014 and happened under previous ownership,” according to the University of Phoenix. The university believes that it “behaved properly,” but claims that the settlement deal will enable it and its students to move forward.

“This settlement agreement will allow us to stay focused on our core mission of improving students’ lives through career-relevant higher education, as well as avoid any additional 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.


1631371966_773_Why-Are-Some-Student-Loans-for-University-of-Phoenix-BeingAre you eligible for loan forgiveness at the University of Phoenix?

Students who attended the Institution of Phoenix between October 1, 2012, and December 31, 2016, may expect to have their outstanding balances with the university waived automatically. According to the FTC, these students do not need to contact the university or the commission to begin the process of debt forgiveness at the University of Phoenix. Eligible borrowers will get letters and emails from the school notifying them that they no longer owe school payments.

The agreement, however, excludes government and private debt commitments. Student loans for University of Phoenix students were not canceled as part of the settlement; only debt owed to the institution was forgiven.

Loan forgiveness has been restricted under the Trump administration and Education Secretary Betsy DeVos. Secretary DeVos revealed her department’s alternative approach to debt forgiveness from the Obama Administration’s Borrower Defense to Repayment regulation on the same day as the FTC’s enforcement action against the University of Phoenix. Under Secretary DeVos’ proposal, debt forgiveness will be limited to partial sums set by a formula.

The Chicago Crusader quotes Whitney Barkley-Denney, a senior policy counsel with the Center for Responsible Lending (CRL), as saying, “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.” “The Department owes the University of Phoenix’s deceived students nothing less than complete debt forgiveness.”

If you were a student at the University of Phoenix, you may be eligible for debt forgiveness as part of a class action lawsuit.

How to Get Involved in a Lawsuit at the University of Phoenix

If you were a student between October 1, 2012, and December 31, 2016, and had outstanding obligations with the institution, those debts should be erased automatically. However, the settlement does not cover student loans taken out for University of Phoenix courses, whether federal or private.

Students who were misled by the University of Phoenix’s claimed deceptive advertising about employment prospects for graduates and did not find work in their field after graduation may be eligible to join a class action lawsuit inquiry.

Because filing a case may be intimidating, Top Class Actions has made it easier for you by matching you with an experienced attorney. A lawyer can assist you in determining if you have a claim, navigating the intricacies of litigation, and maximizing your possible reward.

The “university of phoenix settlement do i qualify” is a question that has been asked for quite some time. The answer to the question is no, you don’t have to pay back your student loans if you were enrolled in the University of Phoenix while they were being investigated.

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