Education Dept. Forgives $37M in Loans for University of Phoenix Scam

The Federal Trade Commission (FTC) has announced that its enforcement action against the University of Phoenix has resulted in the U.S. Department of Education forgiving nearly $37 million in federal loans for over 1,200 students affected by the school’s deceptive practices. The FTC’s case in 2019 had alleged that the University of Phoenix, along with its parent company, Apollo Education Group, Inc., had falsely claimed to have relationships with top companies that created job opportunities specifically for their students and that they worked with these companies to develop their curriculum.

The FTC charged that the school used a multimedia ad campaign to attract students, including ads targeted at military and Latino consumers. The campaign featured high-profile employers, creating the false impression that the University of Phoenix collaborated with these companies to provide job opportunities for its students. As a result of this enforcement action, the U.S. Department of Education will provide relief to the affected students by forgiving their federal loans.

This announcement builds on the FTC’s previous actions against the University of Phoenix, including a record $191 million settlement in which the school was ordered to pay $50 million to the FTC for payments to former students and to cancel $141 million in private student debt owed directly to the school. The order also included provisions to prevent further deceptive business practices by the school.

In March 2021, the FTC began sending payments to eligible University of Phoenix students, totaling more than $45.6 million in relief. The agency also sent additional payments to individuals who had cashed their first payment. The U.S. Department of Education will continue processing borrower defense applications from students who attended the University of Phoenix, were deceived by the school’s job placement claims, and have submitted valid applications for loan forgiveness.

This action highlights the FTC’s commitment to protecting students and consumers from deceptive practices by educational institutions and its efforts to secure relief for those affected by such practices.

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