President Biden said Wednesday he is canceling $37 million in debt for more than 1,000 borrowers who attended the University of Phoenix, a prominent online college.
Mr. Biden said the borrowers were “cheated into believing” that their enrollment would lead to promising careers at Fortune 500 companies.
“Yet those benefits and opportunities never existed,” he said. “My administration won’t stand for colleges taking advantage of hardworking students and borrowers.”
The Department of Education, in reviewing Phoenix, found a national campaign that touted partnerships, including preferential hiring, at Fortune 500 companies, but did not provide any benefit to enrollees.
The discharge of debt applies to enrollees between Sept. 21, 2012, and Dec. 31, 2014, and follows a Federal Trade Commission (FTC) investigation into Phoenix that led to a $191 million settlement in 2019.
“The University of Phoenix brazenly deceived prospective students with false ads to get them to enroll,” Federal Student Aid Chief Operating Officer Richard Cordray said. “Students who trusted the school and wanted to better their lives through education ended up with mounds of debt and useless degrees.”
The University of Phoenix said it “respectfully, but adamantly,” disagrees with allegations from the Department of Education and FTC.
“The claims made by the FTC and the Dept. of Ed were never tested in court,” the university said Wednesday. “We stand behind our statement from Dec. of 2019 in which we admitted no wrongdoing in the Let’s Get Back to Work campaign, a single campaign that ran from late 2012 to early 2014.”
The university said it takes student borrower complaints seriously but will be on guard against false claims.
“While the university is not against relief for borrowers who have valid claims, we intend to vigorously challenge each frivolous allegation and suspicious claim through every available legal avenue,” the university said.
Mr. Biden has made student debt relief a signature issue. He says college costs are out of control and young Americans need relief, though critics say he is pandering to young voters and — in some cases — expecting blue-collar workers to subsidize college-educated Americans through their tax dollars.
Mr. Biden boasted on Wednesday that he’s approved more than $117 billion in debt relief to more than 3.4 million borrowers, including more than $14 billion for more than 1 million borrowers whose colleges “took advantage of them or closed abruptly.”
A marquee plan to wipe away thousands of dollars in student loan debt for each borrower ran into trouble in Congress and the courts.
Subsequently, Mr. Biden recently introduced the SAVE income-driven plan that calculates loan payments based on a borrower’s income and family size, and forgives remaining balances after a certain number of years.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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