Over 1,200 people who attended the University of Phoenix will have their student loans forgiven, the White House announced Wednesday, as President Joe Biden continues to look for ways to deliver on campaign promises after the Supreme Court blocked his sweeping debt forgiveness plan.
In total, the new relief will forgive $37 million in debt for students who the Department of Education said were misled by the University of Phoenix—an online, for-profit institution—through false advertising.
"These borrowers were cheated into believing that by attending the University of Phoenix they would have promising career prospects at Fortune 500 companies—yet those benefits and opportunities never existed," Biden said in a statement shared with Newsweek.
Students who were enrolled at the University of Phoenix from September 21, 2012, to December 21, 2014, and have applied for borrower defense loan discharges, are eligible for debt relief under the new plan. Borrowers can apply for the borrower defense plan if they can demonstrate that they enrolled in a school or continued attending an institution because of misleading information.
The University of Phoenix previously found itself in legal strife over promising prospective students that they would have preferential job opportunities at top companies like AT&T, Yahoo!, Microsoft and Twitter (now X). In 2021, the Federal Trade Commission (FTC) announced that over 147,000 students at the university would receive refund payments totaling more than $50 million as the result of a lawsuit against the school. The agency said it has so far sent over $47 million in refunds.
"My Administration won't stand for colleges taking advantage of hardworking students and borrowers," Biden continued in his statement Wednesday. "As long as I am President, we will never stop fighting to deliver relief to borrowers who are entitled to it—like those who attended University of Phoenix—and we will hold colleges accountable for misleading and cheating their students. "
A spokesperson for the University of Phoenix told Newsweek on Wednesday that the college "adamantly" disagrees with the government's accusations and that the school has not admitted any "wrongdoing" over its advertisement campaign at the core of the FTC settlement.
"With respect to the Borrower Defense to Repayment claims, the University of Phoenix takes student borrower complaints very seriously and has provided significant evidence to the [Department of Education] refuting inaccurate, baseless, or incomplete claims," read the statement to Newsweek. "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 new plan is among several paths that Biden and Democrats have taken to help cancel student loan debt—a major promise of the president's 2020 campaign—after the Supreme Court struck down Biden's plan to cancel up to $10,000 in debt for all individual borrowers whose income was less than $125,000 a year. The high court sided in June with the six Republican-led states who challenged the plan.
In response, Biden has launched several targeted programs that also offer relief as borrowers prepare to start paying back federal student loans in October after a three-year pause due to the COVID-19 pandemic. In June, the Department of Education announced the Saving on a Valuable Education (SAVE) repayment plan for eligible borrowers, which decreases monthly payment requirements.
Democrats have also encouraged Biden to go further with loan forgiveness plans, writing in an August letter, "Working- and middle-class families need this relief to come as soon as possible."
"There is absolutely still a chance of cancellation," New York Democratic Representative Alexandria Ocasio-Cortez said Monday on an Instagram story. "When the Supreme Court struck it down, they said that the administration couldn't use a specific avenue ... but there are alternative avenues that we have pursued. They are going to be laying out that program over the course of the next year."
Update 09/20/2023, 6:34 p.m. ET: This article has been updated with comment from the University of Phoenix.
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Kaitlin Lewis is a Newsweek reporter on the Night Team based in Boston, Massachusetts. Her focus is reporting on national ... Read more
