Biden administration cancels $37 million in student loans for former University of Phoenix students

The Biden administration announced Wednesday it is canceling $37 million in student loan debt for students of the online University of Phoenix. 

The money will cancel the debt for 1,200 former students whom the administration said were tricked into believing the for-profit school had connections with Fortune 500 companies. 

The borrowers who received forgiveness had to apply for the Borrower Defense program, which the Education Department uses to forgive student loans for those who have been defrauded by their university.

The University of Phoenix had to pay $191 million in 2019 to settle claims brought against them accusing the school of using deceptive advertising to attract students. 

“My Administration won’t stand for colleges taking advantage of hardworking students and borrowers. 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,” Biden said in a statement. 

The University of Phoenix is about to be acquired by a nonprofit entity with associations to the University of Idaho system. 

The announcement is the latest effort by the Biden administration to forgive student debt through the Borrower Defense program.

During his administration, Biden has given more than 1.1 million defrauded borrowers more than $14 billion in student debt relief. 

The Department of Education is also working on implementing student loan forgiveness for all borrowers through the negotiated rulemaking process, but it could be months before it is known how much relief could be given and which borrowers would receive it.