The University of Phoenix and its parent company, Apollo Education Group, have agreed to settle allegations of deceptive advertisement brought by the Federal Trade Commission (FTC). The FTC said the University of Phoenix’s ads sought to mislead students with the promise of future job opportunities with large companies the school had close ties to. The University of Phoenix has agreed to pay a record $191 million to settle the complaint, the largest settlement the FTC has obtained against a for-profit school.
The FTC says the university wrongly suggested that it worked closely with high-profile companies to develop its courses and create job opportunities for its students. There were no such agreements in place, investigators found. Instead, many of the companies that were shown as corporate partners were actually part of the University of Phoenix’s “Workforce Solutions” program that provided discounted tuition to their employees in exchange for the companies’ help promoting the school.
Andrew Smith, director of the FTC’s Bureau of Consumer Protection said in a statement announcing the deal, “Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist.” The school is now barred from making false claims about its relationships with companies or employers.
The settlement calls for the university to cancel $141 million in student debts that are owed to the school by people who enrolled from October 2012 through the end of 2016. The University of Phoenix and its parent company have 15 business days to send an email and letter to eligible students, informing them that they’re covered by the agreement and that their debt will be cleared within 45 business days. The school has 55 business days to tell credit reporting agencies to delete the debt from students’ credit reports. The remaining $50 million in the settlement will be paid in cash and used for consumer redress.