Following an announcement that the for-profit University of Phoenix has agreed to forgive $141 million in loans of former students, Democratic presidential candidate Bernie Sanders responded on Thursday: "Good. Now $1,685,456,413,335 more to go."
While Sanders has proposed cancelling all outstanding college and university debt in the U.S. as part of his plan to help revitalize the U.S. economy and re-level the playing field for working-class and low-income Americans, the move by Phoenix (UPO) and its parent company, the Apollo Education Group, comes in the form of a settlement deal reached with the Federal Trade Commission (FTC) early this week and stems from charges of fraudulent and deceptive practices directed at students.
The overall settlement of $191 million includes the debt forgiveness portion and a separate $50 million in cash that will be used "for consumer redress" by the commission.
Good. Now $1,685,456,413,335 more to go. Cancel all student debt and tax Wall Street to fund tuition-free public college. https://t.co/2xlA4UVII6
— Bernie Sanders (@SenSanders) December 12, 2019
According to a statement by the FTC, the settlement—in which the companies admitted no actual wrongdoing—was levied because the for-profit chain and Apollo "relied heavily on advertising to attract students, including specific ads that targeted military and Hispanic consumers. The companies' ads featured employers such as Microsoft, Twitter, Adobe, and Yahoo!, giving the false impression that UOP worked with those companies to create job opportunities for its students and tailor its curriculum for such jobs."
The reality, however, was that the school had no such program. In a scheme that victimized students, the FTC alleged that "these companies did not partner with UOP to provide special job opportunities for UOP students or develop curriculum. Instead, UOP and Apollo selected these companies for their advertisements as part of a marketing strategy to drive prospective student interest."
The FTC's Bureau of Consumer Protection Andrew Smith, in a statement on Tuesday, said, "This is the largest settlement the Commission has obtained in a case against a for-profit school. Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist."
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In June, Sanders introduced a bill in the U.S. Senate that would used funds raised by a tax on Wall Street to fund the cancellation of the $1.6 trillion student debt burden in the country.
"In a generation hard hit by the Wall Street crash of 2008, it forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the 'crime' of getting a college education," Sanders said at the time.
Days later, while others denounced the idea as pie-in-the-sky and unworkable, over one hundred academics endorsed the plan in a joint letter sent to Congress. It read, in part:
While it did not begin in 2008, the student debt problem grew significantly in the decade following the financial crisis, as millions of young people graduated into an economy that was spiraling into the worse economic downturn since the Great Depression—a crisis that was itself the consequence of a failed policy of Wall Street deregulation. None of this should have ever been allowed to happen.
In the face of this crisis, nothing short of a complete overhaul of our public higher education system will suffice. We must treat education as the public good that it is. That means making public colleges and universities tuition-free, just as public K-12 schools are today. It also means hitting the "reset button" on student loan debt by cancelling the entire outstanding amount, so that some 45 million Americans and their loved ones are no longer trapped by the policy failures of the past.
"To some, this will appear too radical," the academics said of Sanders' proposal. "To us, it is the bold solution we need."