Last Updated on January 3, 2024

Many students who attended the University of Phoenix, a for-profit institution that closed in 2015, are struggling with student loan debt.

However, there may be some relief options available for them, thanks to some federal programs and a recent lawsuit.

These programs and lawsuit offer student loan forgiveness to borrowers who feel they were deceived or defrauded by the institution.

In this article, we will explain what these programs and lawsuit are, how they work, and how you can apply for them. We will also provide some tips and resources to help you with your student loan situation.

Let’s get started!

How Does The University of Phoenix Loan Forgiveness Work?

The University of Phoenix has had ongoing legal battles and criticism. It was once one of America’s largest for-profit institutions for higher learning.  Based out of Phoenix, Arizona, the majority of the University’s classes are online.

Today, students of this institution may be eligible for loan forgiveness! Read on to determine if you are eligible and what programs may be to your advantage.

What Caused Problems With The University of Phoenix?

The University of Phoenix (UOP) attracted large masses of students. Promises of lucrative job opportunities and sought-after skills attracted many students. The UOP has also made false advertisements for job partnerships with large businesses. Many students were middle-class or veterans and had to take on student loan debt to enroll.

Currently, the UOP has not been forthcoming with accepting any blame on its part. Despite this, the Federal Trade Commission (FTC) and the UOP are working together. Currently, they are providing students with settlement payouts and loan forgiveness. Former students are now becoming aware of settlements and want to know more. To see if you qualify for a payment from the FTC- read on!

Who Is Eligible For The FTC Payout?

Currently, the FTC is sending a total of $50 million dollars in payments to students who attended UOP. The average payout from the FTC is $337 and arrives in the form of a mailed check. Students must meet all the following requirements to be eligible:

  • Did not have their student loan debt canceled by UOP.
  • Be enrolled in an associate’s, bachelor’s, or master’s program at the UOP between October 15, 2012, and December 31, 2016.
  • Have paid more than $5,000 to the University of Phoenix.
  • Did not object to having their information sent to the FTC by UOP.

What Steps To Take To Have Student Loans Forgiven

Besides the FTC settlement payout, students may be eligible for extra financial relief. The Department of Education (DOE) has stated it is ready to help students further. The DOE is ready to forgive or cancel certain student loans. For students who attended the University of Phoenix, this is great news.

Closed School Loan Discharge

Did you attend the University of Phoenix while the school closed? Many UOP campuses have closed since the start of the COVID pandemic. If your campus is one of the schools that closed, you may qualify for a closed school loan discharge program.

This program can help students who took on federal loans. Loans eligible include federal education loans, direct loans, and Perkins loans. This program does not include students who took on private loans. The closed school loan discharge program has the following requirements for eligibility:

  • You must have been an enrolled student at the time of the school’s closure.
  • You transferred your school credits to another institution. The new program you enrolled in must be similar to the program you were in at UOP.
  • You must have been attending the University of Phoenix for 120 days until or after June 20, 2014.

Students who qualify are eligible for a payment from The University of Phoenix. The UOP has agreed to pay back 191 million dollars to students.

Using BDAR To Have Loans Discharged

The Borrowers Defence To Repayment (BDAR) is another option for students. The BDAR requires students to show that the UOP made fraudulent claims. Students will need to fill out a BDAR application. This application is available to students through the Department of Education.

BDAR loan forgiveness is for students with federal student loans. Students must be able to meet the following requirements:

  • Be able to prove the UOP misled you during your enrollment.
  • Prove the UOP violated state law related to your federal loan. You may instead prove the services the UOP promised to provide were false claims.

Can I Have My Private Student Loan Forgiven?

Unfortunately, student loan forgiveness for private loans is very uncommon. Private companies have little incentive to offer student loan forgiveness. No doubt, this is disheartening to learn if you are currently paying on a private loan. It is unlikely you will have your private loan forgiven or canceled at this time.