University of Phoenix to Pay $191 Million to Resolve Deceptive Ads Charges
University of Phoenix (UOP) has agreed to pay $191 million to settle charges of deceptive advertisements to lure students for enrollment.
In one of the largest settlements against a for-profit school across the country, the university was charged by the Federal Trade Commission (FTC) for using deceptive ads that boasted its relationships and job opportunities with big companies like AT&T, Yahoo!, Microsoft, Twitter, and The American Red Cross.
The commission had alleged the school of using various fraudulent tactics from late 2012 to early 2014 to attract students in general and military and Hispanic consumers in particular. Its ads featured employers such as Microsoft, Twitter, Adobe, and Yahoo to give the impression that its graduates worked with those companies.
“This is the largest settlement the Commission has obtained in a case against a for-profit school,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.
“Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist.”
The University of Phoenix used deceptive ads to lure students in with big promises of well-paid jobs – then loaded them up with debt & useless degrees. @BetsyDeVosED & @usedgov need to follow the @FTC’s lead & cancel @UOPX students’ federal loans. https://t.co/TC9tUMmgsk
— Elizabeth Warren (@SenWarren) December 12, 2019
The university will have to cancel $141 million in debts owed by the students who were harmed by the deceptive ads and pay $50 million in cash. The settlement will not affect student borrowers’ federal or private loan obligations.
The school continues to maintain that it has acted appropriately and didn’t do anything unlawful. It further said that that agreement was done to maintain focus on its core mission and to avoid any further distraction from serving students.
“The University’s efforts have always been driven by the desire to build an institution that offers the flexibility and support our students need to earn their academic goals. University of Phoenix remains as committed to this mission as we have ever been,” the university statement reads.