University of Phoenix settlement is a 'drop in the bucket' for student debt, advocates say.
Advocates for students and veterans lauded a record $191 million settlement reached in a case against one of the country’s largest for-profit college chains this week as an important step forward in protecting students, but said the compensation was “a drop in the bucket” compared to the total debt borrowers owe.
While the settlement is viewed as significant, advocates said the case showed the systemic problems in protecting students targeted by deceptive practices and shed light on the scale of debt students will still owe because of their loans. The $141 million in debt forgiveness applies to debts owed by former students to the University of Phoenix who enrolled during a time when they could have been exposed to false advertising, according to the FTC, but it will not apply to money owed from federal and private loans. The settlement affects students who were enrolled between October 2012 and December 2016.
"Unfortunately, because such enforcement actions are directed against the school, they don't directly cancel the loan debt," she said.
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