What happens when the school that promised you a bright future leaves you in the dark with a mountain of debt?

 

For thousands of students, especially those who attended for-profit institutions like the University of Phoenix, this is more than just a cautionary tale – it’s reality. But if you’ve ever asked yourself, “Can I get my student loans forgiven if my school misled me?” you’re the only one. And the answer? It’s more of a… maybe.

 

Let’s unpack where things stand and how to avoid the traps along the way.

In 2021, the Federal Trade Commission reached a $191 million settlement with the University of Phoenix after accusing the school of deceptive advertising. (iStock)

What Happened at the University of Phoenix?

In 2021, the Federal Trade Commission reached a $191 million settlement with the University of Phoenix after accusing the school of deceptive advertising. The complaint alleged that the university used misleading TV commercials to suggest partnerships and job opportunities with big-name employers like Microsoft and the American Red Cross – relationships that simply didn’t exist.

 

Out of that total, $141 million was earmarked to cancel student loan debt held by the school itself (not federal loans). To qualify, students had to be enrolled between October 2012 and December 2016 and have borrowed directly from the university.

 

But here’s the kicker: this relief only applied to loans issued by the school, not federal student loans.

 

If your debt came from federal aid or private lenders, you likely weren’t included in that particular deal. Still, all hope isn’t lost.

What If You Attended a Different For-Profit College?

The University of Phoenix isn’t the only school under fire. While there’s no confirmed class action settlement involving City College in Fort Lauderdale as of today, that doesn’t mean other legal actions won’t emerge.

 

If you believe you were defrauded, whether through misleading job promises, inflated graduation rates, or shady recruitment tactics, you may be eligible for relief through the Borrower Defense to Repayment program, run by the U.S. Department of Education.

 

This is a legitimate, free path for students who can prove their college misled them.

Beware the "Debt Relief" Traps

Where there’s debt, there are scams. Student loan forgiveness is no exception.

 

If someone promises to “fast track” your forgiveness for a fee, it’s time to run. Debt relief scams often target vulnerable borrowers with fake paperwork, high upfront costs, and empty promises. Remember:

  • You don’t need to pay to apply for federal forgiveness or debt relief.
  • The Department of Education offers free assistance.
  • If it sounds too good to be true, it probably is.

What You Can Do Right Now

If you’re unsure whether you qualify for any settlement or forgiveness, start with these steps:

  1. Check your loan servicer: Was the debt issued by your school, the federal government, or a private lender?
  2. Review your school’s history: Use the Federal Student Aid website to see if your institution has known violations or settlements.
  3. File a Borrower Defense claim: If you suspect fraud, this is your official route.
  4. Avoid third-party “debt relief” companies: Always go through official government channels.
  5. Stay informed: Program rules change, and new settlements can emerge. Check back regularly.
Having debt is hard enough without being taken for another ride. (iStock)

Final Thoughts

Student loan debt is overwhelming on its own. Add in a layer of deception from your school, and it becomes downright infuriating. But there are resources available – real ones – that won’t charge you anything and are designed to help you get justice.

 

If you believe your college sold you a dream and left you with a nightmare, take action and stay vigilant. Having debt is hard enough without being taken for another ride.