Guide to University of Phoenix Loan Forgiveness

The University of Phoenix agreed to pay at least 191 million dollars for their fraudulent marketing tactics and deceptive ads. They used to involve as many students as possible in available study programs offered by the UOP. The FTC charged them after years of investigation and found them guilty on a variety of aspects. The claims were severe, which was the main reason this class action lawsuit created a nationwide shock effect. They falsely advertised their services and ensured that by getting a degree from UOP, students would be able to work in prestigious companies such as Yahoo!, Twitter, AT&T, The American Red Cross, Microsoft, and more. All these aspects will be covered later when we discuss the University of Phoenix loan forgiveness possibilities. Now, let’s do an in-depth analysis of the UOP and see how they evolved to become a fraudulent institution.

History of the University of Phoenix

UOP is the for-profit school that is located in Arizona. The University provides mainly online classes, but there are learning centers and campuses that were functioning until the closure of the UOP. We will get there soon, but now, let’s quickly examine the history of the university. In the late 1990s, the spark of for-profit schools was mainly inspired by the success of the University of Phoenix. John Sperling established the university in 1976, and the initial goal of the owner was to provide more flexible schedules for working adults and new opportunities for youth. At that time, there were some requirements regarding enrollment procedures. For instance, John asked students to be at least 23 years old when they apply to the UOP. Besides that, good credit history and work experience were also crucial for the application process.

However, as time went by, most of those rules slowly turned into guidelines. They started to place profit and financial interests before everything else. University was accepting almost anyone who has a high school diploma with no working experience, good credit, or whatsoever. 

In 1976, when the university was first founded, it had only eight students. As soon as they got accredited by official bodies, the number of students drastically increased. As they grew the brand, UOP moved to San Jose, California, and started a new campus there. From 1989, things began to change with the latest technological inventions and the internet. From that period, the online courses of the UOP became the main focus of the university.

What happened after AEG brought the University of Phoenix?

As the university’s scope was getting bigger and bigger, the popularity of UOP increased even more. It was around 1994 when the Apollo Education Group brought the UOP and made considerable investments in improving the school. With more campuses and practical study programs, the enrollment numbers skyrocketed. It was mentioned that in 2000 the enrollment for the University of Phoenix was more than 100.000, and that number rose to 600.000 when the 2010s started. In 1998, the Apollo Education Group went global and opened a campus in Vancouver, Canada. With these additions, the number of campuses increased to become 200. During those three decades, the UOP was considered the largest for-profit institution in the United States.

The University was offering programs regarding social sciences, health professions, art, and more. You would be able to take bachelor’s, master’s, or doctoral degrees at the same place, and UOP was encouraging students to do so. In the late 2000s, concerns started to rise about the university. New York Times stated that around 85 percent of the total UOP revenue came from federal student loans that students were taking to attend. As the University was promising a successful future that students would get after graduation, mainly poor students or veterans were desperately trying to enroll. Around 2010, the enrollment level started to decline as more and more students saw the reality of UOP.

The enrollment number dropped from 600.000 to 200.000, and UOP closed more than 50 percent of its worldwide campuses. As they lost loads of money after this decline, UOP decided to aggressively advertise their programs with false claims and inflated rates. So, in 2015, FTC started an investigation against the university. In 2017, the investigation resulted at the end of the Apollo Education Group.

University of Phoenix Student Loan Lawsuit

As we already mentioned, the Federal Trade Commission started to investigate the university carefully from 2015. The University of Phoenix student loan lawsuit mainly concentrated on an advertisement campaign that ran from 2012 to 2014. On several occasions, the university head officials argued that this lawsuit is nothing but a distraction. They claimed that while dealing with these lawsuits, they cannot maintain focus on improving the lives of their students. However, that was a lie because the only party that made student lives worse was the UOP itself.

What were the Claims of FTC?

FTC claimed that by using falsified information, UOP tried to convince students to enroll in their programs. Mainly, the target audience was ex-military members and Hispanics. The ads said that they would improve your lifestyle after graduation and help you find high-salary jobs in top-notch companies. However, it was evident that those companies were not partnering with the University of Phoenix. Fraudulent marketing campaigns lead the majority of veterans, active-duty military members, to sign up for the program as soon as the officials announced Post 9/11 GI Bill benefits. Those students thought that through the federal aid program, it would be possible for them to get a higher education and earn a degree in their interested fields. 

Fraudulent Commercials by University of Phoenix

The chance for the University of Phoenix loan forgiveness came into the scene as the company admitted their wrongdoings in the past. The primary claims of the lawsuit were about the misleading commercials. On TV commercials, UOP tried to establish a notion that they are partnering with more than 2000 high-class corporations and lead their graduate students to work there. Besides that, the university claimed that their study programs and curriculum is based on the work of those apparent companies. It meant that after graduation, students would already have hands-on experience in their respective fields and can easily get the job. They did the same in many billboards and radio commercials. Students believed in those claims and took both private and public student loans to attend UOP at any cost. They all regret this decision and now try to pursue the University of Phoenix loan forgiveness opportunities. 

The director of the Federal Trade Commission, Andrew Smith, stated that the UOP case was the largest settlement that they made against any for-profit school until 2017. This class-action lawsuit held back the UOP from gaining millions of dollars and took their reputation. Although they tried to stabilize the process since that time, the number of enrollments was deficient, and the fraudulent tactics that they used became the cause of the downfall. In 2015, University was traded for three billion dollars, and the Apollo Education Group ended its rule here. Right now, the primary owner of the university is Vistra Group.

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Where will the allocated money go after the University of Phoenix Student Loan Lawsuit?

As mentioned before, the settlement between FTC and UOP costs the university around 191 million dollars. The 50 million of that budget will directly go to the Federal Trade Commission for consumer redress. Remaining 141 million will be used in the University of Phoenix Loan forgiveness programs and cancel the outstanding balances of students who suffered from deceptive advertising campaigns.

There were a lot of speculations about loan forgiveness issues in recent years. The most important one was about private, and federal student loans that are not offered by UOP. Students who took the loan from various lending companies are not sure if they can get the University of Phoenix student loan forgiveness. In the next few paragraphs, we will cover all the necessary aspects of the case, guide you about the application process, and answer the most speculative questions regarding the UOP.

Diploma Mill of UOP.

Many students decided to utilize the University of Phoenix loan forgiveness opportunities because they saw that the university’s degree is a joke. None of the reputable organizations are considering those candidates who graduated from UOP. Let’s focus on the apparent signs about the University of Phoenix Diploma Mill in action.

  • UOP is accepting almost anyone who failed to enter any two or four-year colleges. Even if the student could not get past the SAT exam, they are welcomed here.
  • There is no requirement regarding the examinations, pre-tests before entering this university.
  • You can successfully enroll in many programs, even if you did not take the GRE.
  • Most of the valuable education institutions in the US eliminate all the students’ credit scores after ten years of absence. However, UOP accepts those students even if they have been out of school for over 20 years.
  • They do not focus on grammar or language knowledge.
  • Facilitators teach most of the classes instead of professors or instructors.
  • The UOP is functioning as a business entity, and all they care about is money.
  • There is no legit information about the graduates. They hide this information and try to hinder those students who graduated from UOP and could not get a successful career as it was offered to him/her.
  • It is a known fact that plagiarism and cheating are widespread in both online programs and campuses all over the UOP.

As you can see, this multi-billion company is only designed to take the money from students and want to get away with those fraudulent actions not only against students but also investors. These and the deceitful acts, claims by FTC, led UOP to lose its accreditation.

University of Phoenix Enrollment Scams

Besides lying to the public about various rates and allegedly spreading deceitful ads, those were not only illegal actions by UOP. After allegations, it is revealed that several enrollment counselors were directly trained by UOP to convince people to study here. Besides that, the university hired professionals who played a student role and falsified all the negative thoughts about UOP. This is unacceptable. Therefore you have the right to go against this institution and demand justice for lost four years and potentially a career. 

How much debt amount students owe to the UOP on average?

Based on the investigation protocols and student data, it is revealed that almost 77 percent of all enrolled students in the UOP take the loan. For the first year, the amount of the loan is roughly 8830 dollars. In general, the borrowing cap for federal student loans is 5500 dollars. As you can see, the amount is 3300 dollars higher in UOP, which means that the cost of education is very high on average first-year students. For the second year, that loan amount increases up to 9500 dollars.

The rate is enormously high, and the students need to take at least 38000 dollars to complete their degree at the University of Phoenix. As the employers do not accept their diploma, students do not have much of an option than applying for the University of Phoenix loan forgiveness. The UOP is hiding default rates for student loans; that is why it is hard to estimate it by looking at the other variables. However, it would not surprise us if the percentages are higher than seven, which is the national average. 

University of Phoenix Loan Forgiveness

Under the settlement terms with the FTC, the University of Phoenix agreed upon paying back 191 million dollars. The primary part of that amount is allocated for the University of Phoenix student loan refund. In this settlement, UOP stated that only those student loans lent by Phoenix University would be given a chance for loan forgiveness. However, students still got changes through BDAR and loan discharge. In the next few passages, we will mainly focus on those options and analyze them.

How can the BDAR program benefit former UOP students?

Borrower’s Defense law is on the side of students when it comes to this issue. As mentioned, if the university practised fraudulent activities such as providing invalid data, inflating the rates, and deceitfully advertising their programs, students could go for loan forgiveness. Students will accuse the university in doing one or all of the practices as mentioned above against them to utilize the BDAR. It is worth trying because by applying for BDAR, you will have a chance to wipe out all the debt amount that remains in your bank account. The other good news is about the University of Phoenix student loan refund. In the BDAR law, there is a headline that specifies it. It says that if the university practiced those illegal actions against students and worsened his/her prospects regarding the future or career path, those students can get a refund, too, if they are eligible.

So, do not take this fantastic offer for granted and read carefully to avoid missing a chance of getting approval from the DoE. 

How can you support the arguments in the BDAR claim?

Essentially, the main idea of writing a Borrower’s Defense to Repayment claim is to suggest DOE forgive your loan debt because you were the victim of fraudulent actions of the university and no longer can bear to pay it. In other words, the message should focus on the idea that you would never take that loan unless the school deceived you. Without proving that point, you will not be able to get the university of Phoenix student loan forgiveness. That means, in the next period, you should pay up the annual debt amount. The deceitful actions should be performed directly against you. Otherwise, your application would probably get a rejection from DOE officials. Lets quickly list out those illegal practices that Phoenix University has done before. So, you can see them clearly and have time to evaluate the case.

What were the main actions that the UOP was accused of doing?

We have already mentioned false advertising. Therefore, we will skip that point and focus on others. In the class-action lawsuit, FTC revealed that

  • The University of Phoenix submitted falsified aid statistics to the Federal Government. By doing so, they managed to get approval for additional federal funding.
  • They Inflated the graduation rates, and job placement rates.

What to include in your BDAR claim when applying to University of Phoenix Loan Forgiveness?

As you can see from the fraudulent actions by UOP, it is easier to evaluate the case on a personal level. If you feel like one of these actions is practiced against you, you should file a BDAR claim. Keep in mind that your BDAR application is a legal document, and it should contain facts and evidence about the case. If you do not have any proof, it will be harder for you to get approval. Those pieces of evidence might consist of call recordings, screenshots of the emails, chats, bills, or anything of that nature. It is not easy to find that evidence on the web because, as mentioned earlier, The UOP is hiding the information and hindering graduates from speaking against them. However, that should not demotivate you as there are certain things that UOP admits of committing. 

Where do you need to submit your BDAR Application?

The United States government has an official website for the Borrowers Defense Discharge program. Through that portal, you need to fill the application and submit it. Be careful about student loan scams that became frequent these days. Do not share your personal information with third-party agencies or individuals because it can cost you more than you think. Those scams are very dangerous in that regard because, from stealing your money to identity theft issues, they are all related to those criminals. So, be careful. 

Is there any way to check the status of the BDAR application?

There is no set date that you can expect to learn the results when it comes to BDAR applications. All you need to do is to complete and submit it as soon as possible. For now, the program is active, but we do not know what will happen in the future regarding the BDAR. So, for UOP students who waited long enough for this type of opportunity, it is the right time to utilize the University of Phoenix loan Forgiveness. The procedure can take from several weeks to months. Do not lose your hope if you could not get a result after 3-6 months.

There are thousands of applications, and DOE is trying to finalize them all. Sooner or later, you will get the results. There are two results that you can get as a result of this process. The first situation is that you might get approval, which means that you no longer owe the UOP even a penny from that time. The second instance is when you get refusal from DOE. And in that case, you need to focus on other possible programs for eliminating the loan debt. We will cover those options later, but now, let’s take a look at another controversial issue regarding the BDAR, the tax billings. 

Apply for Student Loan Forgiveness Help

If you struggle with university student loan forgiveness, then you should get help with that. Because the employees in these agencies are dealing with the student loans every day and they have enough experience for solving different kinds of student loan problems.

The Downside of Loan Forgiveness-Tax Bills

It is an excellent opportunity to consolidate, cancel, or discharge your student loans. It will wipe out a huge debt amount, and you will compensate yourself after all the negative consequences that fraudulent universities made you go through. However, one issue appears after you successfully completed the loan forgiveness process. That is the forgiven loan tax bill. You need to report the forgiven amount as income in your tax returns. It is where things get complex, and many questions appear on your mind, such as:

  • Should I pay taxes on forgiven debt?
  • Is there any exception?
  • Is there any way to avoid that, and so on.

First of all, there are exclusions and exceptions that you need to be aware of. IRS defines those aspects in their 4681 publication in 2017. The exceptions are about the amount of debt and specifications regarding how much of it is a taxable income.

Exceptions for student loans

As it is the main subject of the article, let’s go through the examples of UOP Imagine that you got an approval on your BDAR application and got rid of the University of Phoenix’s debt amount. After that, the loan lender that you took money from, will issue yo8u with an IRS form 1099-C. This means that the forgiven amount on your debt will be considered as taxable income. However, there are instances in which you can avoid this.

Health Care workers

For those students who used the NHSC loan repayment program or state education repayment, it is possible to avoid taxes. By agreeing on terms of working in health professional shortage places, you can eliminate the amount and continue your job. Another case is when you utilized the University of Phoenix loan forgiveness. The primary intention of the healthcare student loan forgiveness program is to increase the availability of health care services in areas where it lacks. 


Using these exclusions, you can exclude the forgiven debt amount from the tax fillings as taxable income.


For programs like Public service loan forgiveness, you can exclude the tax amount if you are employed by non-profit organizations and meet specific criteria.

What are the qualification options?

  • The loan servicer should be the local government, the federal government, or any subdivision of the institutions, as mentioned earlier.
  • The people who work in state or municipal hospitals and are considered public employees

Financial Hardship and Disability

Total or permanent disability and health concerns play a massive role in getting loan forgiveness. Not only that, but also tax fillings are affected by these notions too. For lifelong diseases, illnesses, or injuries, students can avoid paying taxes for the forgiven debt amount.

The IRS states that in three instances, that will not count the forgiven debt as taxable income. Those cases are:

  • Through doctor certification
  • Through social benefits
  • And through certification from DVA.

In addition to these criteria and disability discharges, there is a thing that is called insolvency. In this regard, if the student’s total liabilities are higher than his/her assets, they are considered insolvent and not required to pay taxes for forgiven loans.

University of Phoenix Loan Discharge

You may get relieved from payment obligations under certain conditions. We talked about disability, inability to repay, and all that previously, but this one is not about loan forgiveness, it is loan discharge. Current conditions allow eligible students to effectively use loan discharge provisions for both FFEL and Direct loans that they have. There are distinct differences between loan forgiveness and discharge. For instance, loan forgiveness is mainly focused on the services that you will provide in return to the public. However, loan discharge is eliminating debt amount without asking for anything in return. It can happen on a variety of occasions, and we will find out the available types of loan discharge next. 

Death Discharge

Student loan discharge can happen when the borrower dies. This type includes 

  • Grad PLUS
  • Direct Loans
  • Parent PLUS
  • Unsubsidized and Subsidized loans
  • And Perkins Loans

To acquire this type of loan discharge, the borrower’s family needs to file a document to officials that include an accurate photocopy of the student’s death certificate. After that, there will be no payment collection activities, and the bank account will set to zero. Regarding the tax issues, you need to talk to an agent and confirm the case with the IRS to avoid further problems. 

There are other non-federal programs that allow you to use death discharge. For instance, the list includes

  • Wells Fargo loans
  • Loans from Higher Education Services Corporation of New York
  • Sallie Mae loans
  • Discover loans

If there were cosigners while the student took the loan, further investigation would be made. If the lender finds out that the cosigner does not have a stable income, they will pass on this. However, for those students who had wealthy cosigners, the case may be a little bit different because those people should pay the remaining debt amount if that happens. 

Bankruptcy Discharge

There are two critical aspects of the bankruptcy discharge, which are Chapter 7 and Chapter 13. Under these laws, you can use your chances to get the University of Phoenix loan discharge. Undue hardship is an essential category that you need to consider. Undue hardship exception is about the case where a student claims that if he/she pays back the amount, they would not be able to continue their lives, and it will lead them to inevitable financial hardship. There are some tests that courts use to define whether or not the student is right about this exception. The most popular test is Brunner.

In the Brunner test, the judge will look at three major factors. They are

  • Poverty- it is based on the current and expected expenses of the student. If, after paying back the loan debt, the student would not be able to maintain at least the minimum standard of living, then this rule applies to him/her.
  • Persistence-If, the student’s insufficient financial status, and condition, will last longer.
  • Good Faith- If the student did all he/she can do to pay back the debt but failed

Totality of Circumstances

It is another test which includes all the necessary factors and measures according to the result.

While trying to discharge your loan from the University of Phoenix, you need to know the differences. The court choice is crucial because while some are harsh on students and make a variety of tests, others are considerably easier to pass the undue hardship tests. 

The cases when you are eligible to use University of Phoenix Loan Discharge for Bankruptcy

  • If the student took the loan for attending the university that is not eligible for Title IV student aid
  • Students who applied for programs that have loan discharge provision
  • Students who qualify for low-income Parent PLUS programs can be great candidates for loan discharge through bankruptcy. It is because those students would not be able to apply for PAYE or income-based programs.
  • Students who are healthy but have a dependent that needs support are eligible for bankruptcy discharge. The support may be financial and physical in case if those dependents are injured or have a permanent disability. Close family members are considered as dependents in this case. As the student is not directly suffering from those injuries, they would not be able to get disability discharge. 
  • In cases where the debt amount is massive, and the student would not even pay a quarter of it through aid programs, they are considered legit candidates for bankruptcy discharge.
  • Non-qualified loans are great for bankruptcy discharge. Minor errors, whether it is made deliberately or not, can lead the loan to become non-qualified. If loan servicers missed to include promissory notes regarding the educational costs, this loan would become non-qualified, and borrowers will be able to apply for bankruptcy discharge.

University of Phoenix Loan Forgiveness through False Certification

Former students of Phoenix University can get rid of their student loan debt through false certification. Let’s look at the cases where you can be eligible for this. 

Ability to Benefit

In case if the university falsely certified the student for aid programs just because they have the ability to benefit from those programs.

Unauthorized Signature

If the university used a student’s signature without his/her permission in documents regarding the aid programs


If the university provided certificates to those students who will not be able to meet employment requirements in the future, those students get aid. However, school hides the fact that they have a criminal record or are ineligible because of their mental or physical condition. 

Identity Theft

If the student’s private information was stolen and used by criminals to get the aid, by providing the pieces of evidence that you were the victim of such a case, you can get the University of Phoenix loan forgiveness and eliminate the debt amount. 

Unauthorized Payments

If the university signed documents without students’ authorization and got the money, students have the right to apply for false certification. 

The critical date that you need to remember about eligibility is January 1 of 1986. If the student took the loan prior to this date, they are not eligible to use false certification for loan forgiveness

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Unpaid Refund Discharge

Unpaid refund discharge is a case where the student:

  • Was terminated from his/her academic career
  • Withdrew from university
  • Did not attend classes

If these cases happen before those students reach 60 percent of the loan, they are eligible to get a proportional unpaid refund. An unpaid refund will cover outstanding interest rates too. All the loans that are taken after January 1, 1986, are entitled to this rule. The refund for 9/11 Victims and their families is calculated according to the Return of the Title IV rules. 


On federal student loans, the family members, including wives, children, and parents of the 9/11 terrorist attack victims, can get 100 percent of loan forgiveness if they studied at the University of Phoenix. Besides them, The United States Armed Forces members, Police officials, and public servants who are involved in that incident are also able to get the loan forgiveness + the refund. 

Closed School Loan Discharge

You may think that the University of Phoenix is still functioning, so why would the students be eligible to get closed school loan discharge? The truth is, in September of 2017, more than 20 campuses of the UOP got closed worldwide. The case for other campuses was not so positive either, and they barely survived after the news broke out about their illegal advertising campaigns and FTC’s settlement. Former students of the University of Phoenix can be eligible for this program if they

  • Were studying in the university when the campus shut down
  • Completed degree during 120 days before or after the campus shut down
  • Withdrew or took academic leave during 120 days prior to or after the campus shut down

The students who transferred their credits to other universities or used a teach-out would not be able to get benefit from closed school discharge. Besides this one, there are other available opportunities for students of Phoenix University. Those options include performance bonds or state tuition assistance and recovery programs. The students who want to enroll in the University of Phoenix loan forgiveness program through closed school discharge, they can download the school closure form, fill it out, and send it to the respective organizations. 

Final Thoughts

The former students of UOP who studied between October 1, 2012, and December 31, 2016, are eligible for the University of Phoenix Loan Forgiveness. The process can happen automatically for those students. If not, they can utilize the methods mentioned earlier and go through loan discharge options and hopefully get a refund. Keep in mind that automatic loan forgiveness will apply to those students who directly took the loan from UOP. For others who took federal or private student loans to study at the University of Phoenix, it is recommended to search for other available options.

Whatever the option may be, you need to hurry up for application. Under Donald Trump’s administration and Betsy DeVos, the Education secretary, the availability of student loan forgiveness programs in the future is under question. On the same day, when the Federal Trade Commission announced their settlement with the UOP, and enforcement actions, Secretary DeVos stated their new alternate approach regarding the loan forgiveness. In this new plan, it is expected that the capacity of forgiveness programs, including the University of Phoenix Loan forgiveness, will be limited soon. Whitney Barkley argued that, as much as the new administration is trying to make things easier for institutions to steal money from pockets of students, FTC is trying to protect them and their families. So, fight for your rights and enroll in either program to get rid of the loan debt!