University of Phoenix to cancel $141 million in student debt

December 12, 2019

By Scott Olson, NBC News

The University of Phoenix and its parent company have agreed to pay $50 million in cash and cancel $141 million in student debt to settle allegations of deceptive advertisement brought by the Federal Trade Commission.

The deal, announced Tuesday, settles a dispute over an ad campaign the for-profit college launched in 2012 touting partnerships with companies including Microsoft, Twitter and Adobe. It suggested the school worked with those companies to create job opportunities for students, even though there was no such agreement, investigators found.

Image: University Of Phoenix

The Federal Trade Commission said the settlement is the largest the agency has ever obtained against a for-profit college.

“Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist,” said Andrew Smith, director of the Federal Trade Commission’s Bureau of Consumer Protection.

The University of Phoenix said in a statement that much of the dispute focused on a single ad campaign that ran from 2012 to 2014. It said it agreed to the deal “to avoid any further distraction from serving students.”

“The campaign occurred under prior ownership and concluded before the FTC’s inquiry began. We continue to believe the University acted appropriately,” the company said.

Apollo Education Group owns the University of Phoenix. The Arizona-based for-profit college chain has 55 campuses across the nation and teaches thousands of students through its online programs. It’s the nation’s largest recipient of GI Bill tuition benefits for military veterans.

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https://www.nbcnews.com/news/us-news/u-phoenix-agrees-cancel-141-million-student-loan-debt-n1099681

‘I’m working until I’m 75’: Factory worker describes family’s student debt nightmare

December 2, 2019

By Aarthi Swaminathan

Student debt isn’t just a student problem. Across the U.S., many parents also struggle with the burden of student loans.

A recent survey by Freedom Debt Relief found that 37% of 1,506 American adults said their children’s college education cost has made them feel financially overwhelmed. And 20% said that the stress has contributed to mental or emotional health issues.

More than 40% said education costs impacted their retirement plan, with 31% indicating that they had “given up retiring when they initially desired.”

Yahoo Finance spoke with one parent in a particularly difficult student loan situation: a 60-year-old factory worker from Scranton, Pa., who had cosigned a loan for his son. (The man, whom we’ll call Frank, asked for anonymity to protect his son.)

Student debt is affecting parents of borrowers‘It’s not nice for a hard-working middle class family’

Frank’s student debt experience began when his son got into a college. As a “middle-class working family” that brings in about $75,000 a year, Frank and his son started borrowing.

The son fell seriously ill after attending the school for one-and-a-half years and dropped out. After his health improved, the son decided to resume his education at a different school. All the while, both father and son continued to borrow.

The expenses began mounting: The family had a refinanced mortgage and credit card debt, as well as home and car insurance to pay. On top of that, they had recurring medical bills. And there was the possibility of more kids going to college.

“[With] some of my bills, I was in no position to barely help myself,” Frank said.

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https://finance.yahoo.com/news/student-debt-family-burden-175514385.html

U.S. Education Dept. Cancels Loans for 1,500 Defrauded Students

November 11, 2019

By Stacy Cowley, The New York Times

Education Secretary Betsy DeVos has been under pressure from lawmakers and the courts over her handling of student-loan relief programs.

About 1,500 students who attended two art institutes that were part of the sudden collapse of a career-school chain this year will have their federal loans canceled, Education Secretary Betsy DeVos said on Friday.

It was a rare victory for borrowers seeking debt relief from a department that, under Ms. DeVos, has frozen or curtailed relief programs for students who claim that schools defrauded them. Borrowers who attended the two schools, the Art Institute of Colorado and the Illinois Institute of Art, sued the department last month, seeking to have their loans eliminated.

“Students were failed and deserve to be made whole,” Ms. DeVos said. Students who attended the schools from late January 2018 through the end of last year, when they shut down, will have their loans for that period canceled, the department said.

Borrowers will still generally owe on federal loans they took out before Jan. 20, the department said in an email sent to borrowers on Friday. Some people, however, may qualify to have all of their loans eliminated through the department’s closed school discharge program.

The decision was the latest twist in the messy unraveling of the chain, Dream Center Education Holdings, which owned dozens of campuses under the Art Institutes, South University and Argosy University brands.

Dream Center was owned by a Christian nonprofit that acquired the troubled group of for-profit schools in late 2017. It closed some schools within a few months, and the entire chain abruptly shut down barely a year later after millions of dollars in federal financial aid funds that were owed to students went missing. The money has still not been recovered.

The accreditation for the Art Institute’s Colorado and Illinois campuses was removed by the Higher Learning Commission in January 2018, around the time Dream Center took them over. The loss of certification meant that students risked being unable to transfer their credits to other schools or have their credentials recognized by employers.

Officials at the Art Institutes never told students that the campuses had lost their accreditation, according to court filings and the Higher Learning Commission.

By law, the Education Department is not allowed to release federal student loan funds to for-profit schools that are not accredited. But the department sent more than $10 million to the two schools and, according to emails and other records, told Dream Center officials that it was working to allow schools to become retroactively accredited.

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In The News: Millennials have an average of $28,000 in debt—and the biggest source isn’t student loans

September 20, 2019

By Megan Leonhardt, CNBC

It may seem like student loans and millennials are inextricably linked. But a new survey shows that education bills are not the leading source of debt among this generation.

Millennials (defined here as ages 23 to 38) have racked up an average of $27,900 in personal debt, excluding mortgages, according to Northwestern Mutual’s 2019 Planning & Progress Study. The findings are based on a survey conducted by The Harris Poll of over 2,000 U.S. adults.

The biggest source of debt? Credit card bills. And that’s a “troubling” trend, Chantel Bonneau, a financial advisor with Northwestern Mutual, tells CNBC Make It.

“One issue that a lot of millennials have is that they have not wanted to sacrifice their lifestyle, even though they have student loans or lower incomes,” Bonneau says. “That has left us in this spot where they’ve accumulated a significant amount of credit card debt.”

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https://www.cnbc.com/2019/09/18/student-loans-are-not-the-no-1-source-of-millennial-debt.html