Predatory Practices at the University of Phoenix

By April 5, 2016News, Student Loan News
University of Phoenix

The largest for-profit college currently affecting our country is the University of Phoenix. Like many other for-profit colleges, University of Phoenix has been under a lot of scrutiny lately, for a variety of issues ranging from objectively immoral, to downright predatory and illegal.

Most recently, the Arizona based school was found to be aggressively recruiting our country’s brave veterans, using deceptive promises to gain their trust, and ultimately the student loan profit gained by their admissions. The university has managed to overturn the Department of Defense’s ban on student loan assistance for new veteran students to the school, but this is the largest for-profit college we have, and with that title comes substantial political pull.

It has been alleged in the past that new entrants to the University of Phoenix were deliberately rushed through the admission process, in order to mask students’ enrollment in private student loans. While the University of Phoenix does make a majority of its’ income through federal student loans, as do most other for-profit colleges, the profit margins on private student loans are substantially higher. The University has also been found to withhold diplomas and certifications pending payments being received. In 2006, UoP was fined $6 million for charging students attending study groups an instructional hourly rate.

In another lawsuit, the University of Phoenix was sued by two former recruiters alleging the university had fraudulently obtained somewhere in the neighborhood of $3 billion dollars of federal financial aid money by offering monetary incentive to its recruiters, based on the number of enrollments they could procure. I happen to have spoken with a former recruiter recently about his time at University of Phoenix. He wishes to remain anonymous, so I will just relay the picture he relayed to me. In his words, the recruiters were in their own building that consisted of several floors of hundreds of people working the phones. Recruiters were instructed to call students again and again to jump on even the slightest possibility of gaining an enrollment. He described it as a complete boiler room atmosphere. Many former students can attest to this, as well as countless others that ever requested information from the school. It’s borderline harassment. Circling back around to the lawsuit at the beginning of this paragraph, it was ultimately settled by the University to the tune of $67.5 million dollars, as well as $11 million in legal fees.

The student loan crisis is real, and at $1.3 trillion dollars, I’d say media sources calling it an epidemic are right. For-profit colleges may not be the entire reason for that astronomical amount, but the unethical recruitment of students has made a substantial impact nonetheless. These schools willingly, and repeatedly, enroll students they know are unlikely to graduate, get a job in their field of study, or pay back their loans.

I would like to clarify now, that although this is an opinion piece, the references to past lawsuits and allegations are completely factual and can be found on many legitimate news sources across the web.

I am Jason Smith, a blogger for Grad Loan Resolution. Grad Loan Resolution is a Christian organization founded to assist former students burdened with debt. We especially like to focus on for-profit colleges, because we feel students from these institutions have been unfairly victimized, and deserve a helping hand. If you are struggling with student debt from the University of Phoenix, give us a call at (888) 408-5491 to see how we can assist you. If you prefer, there is also a form below this article you can fill out to have one of our loan counselors reach out to you. There are new loan forgiveness programs available for 2016, so if you tried to qualify last year and were unable to, you should give it another shot this year. For more information on our programs and services, you can check out our free eBook here. We also just launched a new podcast series that will provide weekly updates to the latest student loan news and programs. You can listen to past recordings here. If you have any questions, I will be personally responding to comments below. Thank you for reading, and God bless you!

Join the discussion One Comment

  • kristina Owens says:

    I attended the UOP & had my date of graduation 2011. Prior to me walking I get a call from my counselor stated that I needed to take one more course (which cost additional funds). Although I was currently in my final class & due to walk in a few weeks. I walked with my class & of course life changes occurred. Due to a few life changes & years later. I reached out to UOP & requested to complete the final class. Well UOP informed me that the program was discontinued & I needed to complete 6 more classes in lieu of the original 1 course. Which of course required a lot more money than I anticipated. I was told I could write a letter requesting to be put back in the previous program. I did & it was DENIED, twice. I don’t know what to do at this point. I have over $50000 in student loans.

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