147,000 University of Phoenix Students Receive Direct Payments in Misleading Advertising Settlement

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The Federal Trade Commission (FTC) is sending checks totaling nearly $ 50 million to 147,000 University of Phoenix alumni in a settlement regarding the school’s use of misleading advertising.

The lawsuit against the for-profit school and its parent company Apollo Education Group was settled in December 2019 with the FTC for $ 191 million and alleged that the university used deceptive advertisements that “falsely touted its relationships and employment opportunities with companies such as AT&T, Yahoo !, Microsoft, Twitter and the Red Cross American ”.

The FTC also said the University of Phoenix provided false impressions that schools were working with these companies to create jobs for its students and a program tailored for those jobs.

“The FTC made allegations regarding a campaign that ended in 2014 that have not been tested through litigation and do not constitute factual findings of the FTC or a court,” said a spokesperson for the University of Phoenix at Yahoo Finance. wrongdoing and continues to believe he acted appropriately. This settlement agreement allowed us to continue to focus on our core mission of improving the lives of our students through career-relevant higher education, and avoiding any other distractions from serving students that might have resulted from ‘protracted litigation.

The settlement had required the university to write off $ 141 million in debt owed to the school by students who were harmed by the bogus ads, and $ 50 million in cash. This money, the FTC announced on Wednesday, will be distributed in the coming days.

(FTC)

The FTC is mailing 146,804 checks and 677 PayPal payments to students enrolled in a master’s, bachelor’s, or associate’s program at the University of Phoenix between October 15, 2012 and December 31, 2016, students who paid over $ 5,000 in cash. , scholarships, federal and private student loans or military benefits, students who did not get their debt forgiven as part of the settlement, and students who did not withdraw from the University of Phoenix in providing the student’s contact information to the FTC.

“This is the most significant settlement the Commission has achieved in a case against a for-profit school,” said Andrew Smith, director of the FTC’s Office of Consumer Protection. 2019. “Students who make important decisions about their education need facts, not imaginary job opportunities that don’t exist. “

This isn’t the only recent settlement between a regulator and a large for-profit school: in September 2020, the Consumer Financial Protection Bureau (CFPB) settled with the now defunct for-profit channel ITT Technical Institute on its predatory lending practices.

There has been a boom in graduate enrollment at for-profit schools like Phoenix during the fall and spring semesters, according to data from the National Clearinghouse Research Center, as the coronavirus pandemic has provided an opportunity for schools with effective marketing and distance skills.

Some predatory for-profit schools focus on aggressive recruitment and rapid enrollment of students, Yahoo Finance previously detailed, even if they leave the students with heavy debt levels.

More than 24,000 borrower defense claims were filed against the University of Phoenix in December 2020, according to an access to information request obtained by Yahoo Finance.

This story has been updated with a statement from the University of Phoenix.

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