$191 million FTC settlement with University of Phoenix addresses deceptive employment claims

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When a person is juggling job responsibilities and other commitments, why take on the extra effort of enrolling in college? As University of Phoenix’s market research revealed, career opportunities are the major motivator. That’s why University of Phoenix, a for-profit post-secondary school, created its “Let’s Get to Work” marketing campaign. The ads – some of which specifically pitched members of the military – prominently name-dropped employers like Adobe, Microsoft, and Twitter. But according to the FTC’s complaint and proposed $191 million settlement with University of Phoenix and parent company Apollo Education Group, the defendants made misleading claims that they had special relationships with those high-profile companies and others that created employment opportunities specifically for Phoenix students. What’s more, the complaint alleges that University of Phoenix made deceptive representations that it worked with major employers to develop its curriculum.

FTC settlement with University of PhoenixUnder the $191 million settlement, University of Phoenix and Apollo Education Group will pay back $50 million in cash to former students, cancel $141 million in debts owed directly to the school, and will change its conduct in the future. The monetary judgment is the highest in an FTC case involving a for-profit school.

How did University of Phoenix convey those allegedly misleading employment messages? You’ll want to read the complaint to get a flavor of the multimedia “Let’s Get to Work” campaign. According to a TV ad called Parking Lot, “Like a lot of things, trying to find a better job can be frustrating, so at University of Phoenix we’re working with a growing list of almost 2,000 corporate partners, companies like Microsoft, American Red Cross, and Adobe, to create options for you.” The ads also featured the logos of Avis, MGM Resorts International, Hitachi Data Systems, AT&T, and Newell Rubbermaid.

Another TV ad opened with a close-up of oak doors marked Hall of Success, revealing photos of former Phoenix students and logos of national employers. The narrator cited one alumna as an “Executive Director at American Red Cross” and mentioned another graduate named Garlin, who works at Yahoo!. As the camera showed gilded portraits bearing corporate logos, the narrator said, “And for every Garlin, thousands more are hired by hundreds of top companies.” Another ad focused on partnerships with companies like AT&T and Allied Barton that purportedly resulted in hiring programs for veterans who attended University of Phoenix.

In addition to TV, radio, and online ads, University of Phoenix distributed talking points to its enrollment advisors so they could convey the same messages when personally pitching to prospective students. One document claimed that University of Phoenix’s relationships with corporate partners, including many Fortune 500 companies, offered an “inside track” and a “competitive advantage to our students,” as evidenced by alumni hired by “hundreds of top companies like Microsoft, Yahoo!, American Red Cross and CBS.” Additional talking points touted a portal that supposedly provided “[a]ccess to unique job opportunities and connections exclusive to University of Phoenix Students.”

The FTC says Phoenix’s enrollment advisors also told people that high-profile companies hired Phoenix students because of its relationships. For example, one advisor said the University of Phoneix had “over 2,000 corporate partners and national industry partners that are looking specifically at University of Phoenix students to hire instead of any other schools.” Another advisor claimed to have “over 2,000 partners in the local area” who “hire our students first and from there they go on.”

To bolster its claims, University of Phoenix also represented that major employers had helped to develop its curriculum. According to a radio ad:

If you want to know how to get hired, it pays to go right to the source. At University of Phoenix we’re talking to companies like AT&T, Sodexo, and Adobe about what they're looking for in future employees. They’re helping us shape our curriculum to make sure today’s classes help prepare you to pursue tomorrow’s jobs.

So what are the facts behind those purported employment partnerships? According to the FTC, the companies referenced in the Parking Lot ad didn’t have special relationships to create job opportunities for University of Phoenix students. Instead, the complaint alleges, many of those “2,000 corporate partners” simply received tuition discounts for their own current employees. What about those graduates supposedly employed by big-name businesses? The FTC says many of them already worked at the companies before they attended University of Phoenix. Furthermore, many of the “unique job opportunities” the defendants touted were widely available to non-Phoenix students. Even the opportunities for veterans who attended University of Phoenix were open to any veteran. The FTC also challenges as misleading University of Phoenix’s claims that major corporations helped design its curriculum.

According to the lawsuit, internal voices raised questions about the accuracy of the defendants’ ad claims. For example, more than a year after the launch of “Let’s Get to Work,” a senior executive acknowledged that “[w]e all agree that our current advertising messaging is a bit light on support.” Regarding the representation that big-name businesses had helped develop University of Phoenix’s curriculum, another senior officer alerted others in-house that the campaign was creating “misconceptions.” The executive explained that University of Phoenix is not “working directly with companies one at a time and/or creating custom curriculum based upon their needs.”

In addition to the $191 million in cash and debt forgiveness, the proposed order prohibits the companies from misrepresenting University of Phoenix’s relationships with corporate partners and curriculum development. The order also requires that the defendants ask the consumer reporting agencies to delete the forgiven debts from people’s credit reports, deliver a specific notice to those receiving debt forgiveness, and ensure consumers’ access to their diplomas and transcripts.
 

 

Comments

How does this refund work for Post 9-11 Vets that have timed out of the program and will be unable to reuse a Post 9-11 refund if it is refund? You have 10 years from date of discharge to use post 9-11 and even if you have "money on the books" you can not use it after the ten year mark. The law that authorized post 9-11 does not authorize it to be reopened.

The FTC doesn't have information now about how the settlement affects people's veterans' benefits. The settlement between the FTC and the University of Phoenix does not affect your private loans or federal government loans.

Under the settlement, the University will cancel $141 million in debts that are owed directly to the school by people who first enrolled at the school between October 1, 2012 and December 31, 2016. The University will cancel debts owed directly to the school whether they were charged as fees or some other kind of charge. The University will send a notice to each person whose debt to the school is being cancelled.

The University also paid $50 million to the FTC as part of the settlement. The FTC will identify people who are eligible for a payment from the $50 million the University paid to the FTC. You don’t have to apply or submit a claim to get a payment. If you would like to get email updates about this settlement, please sign up here.

How do we put an address change in since I went to school during the time frame but have moved since then ?

Hello Jennifer can you please tell me how do you even go about seeing if you qualify because I don't see how.Thanks

Hi. Can someone tell me when the FTC will identify those eligible for a refund for the 50 million. I haven't read anything on when eligible persons will or have received anything.

Thanks!

Some individuals received emails from UofP in July stating they were "required to share certain of your personally identifying information to the Federal Trade Commission (“FTC”) in order facilitate the FTC’s disbursement of settlement funds to certain current and former University students." I got it on 7/24. it basically said that UofP was going to send my info to the FTC and I had to fill out a form if I did NOT want that to happen. I am not sure if those emails only went to students that were identified as "eligible" or to everyone. There doesn't seem to be any information available as to a timeline and no way for us to find out if we will be included in the settlement.

Hi I dont recall receiving an email but I did receive letter stating the same exact thing. Hopefully well hear something soon.

Yes. I absolutely remember receiving the email

Does anyone know when those eligible for a redund will be identified?

When well yall?be send out the settle meant money to everyone

I am affected with this fraud. I took a Federal loan just to make ends meet. How am I not included in this settlement?

Thanks for asking this question because I wasted 2 years of my benefits and time on this school and then to find all this out. I was told we can ask for review with VA and they may can give is those months back that was used under our Post 911.

Very upset that this happen to us and now stuck with loans that made me be so much in debt as a single mother and Veteran

I submitted my case December 13, 2020 with the Federal Trade Commission. I was told by a rep that my case was added to this lawsuit. I have not heard anything all year and anytime I call the hotline, I am told that there is no update since December of 2019. Does anyone have any information? I cannot even get a rep on the phone now.

You do not have to apply or submit a claim to get a payment. 

Under the settlement between the University of Phoenix and the FTC, the University paid $50 million to the FTC. The FTC will identify people who are eligible for a payment from that $50 million. Please sign up here like to get email updates from the FTC about this settlement.

This blog from 2019 explains more about the settlement. 

How do I know if I am affected by the the University of Phoenix issue?

You guys are being super vague. Are you even sending out reimbursement checks or just holding on to it until it all blows over.

What happens to their accreditation?

What about the students that were enrolled earlier in 2012? Similar ads were used during this timeframe.

I'm also interested in this. I first enrolled in August 2012 and graduated in July 2016. I not only enrolled because of those deceptive ads, but I stayed because of the deception from counselors backing up the claims of the ads.

The settlement between the FTC and the University of Phoenix does not affect your private loans or federal government loans.

Under the settlement, the University will cancel $141 million in debts that are owed directly to the school by people who first enrolled at the school between October 1, 2012 and December 31, 2016. The University will cancel debts owed directly to the school whether they were charged as fees or some other kind of charge. The University will send a notice to each person whose debt to the school is being cancelled.

The University also paid $50 million to the FTC as part of the settlement. The FTC will identify people who are eligible for a payment from the $50 million the University paid to the FTC. You don’t have to apply or submit a claim to get a payment. If you would like to get email updates about this settlement, please sign up here.

It doesn’t seem right that if you had to get federal government loans or private Loans that U of Phoenix doesn’t have to pay that back! Their advertising about the companies they worked with was why I started attending in the first place. I thought it was a smart decision for my family but it just created more debt!

I agree. Because I have federal loans, I do not qualify!?! Just one more way of keeping those of us that work to pay our bills and student debt in place.

I agree. Those debts owed directly to the university were from people who could afford the tuition bcuz of their jobs and life status. Those of us that went and got government loans were bcuz we wanted to get a better paying job. In the end, most of those who were deemed non-eligible for student loans probably already paid the UOP their money, Whereas, the federal student loans are still out there. I hope the FTC figures that out.

I agree that this seems disciminatory to those lower class individuals, like myself, who had no choice but to use loans thinking we would be able to pay them back once we were graduates and benefiting from the promises made by the University of Phoenix. I started in 2016 and after getting two degrees - one of which was defunded by the government - I chose to continue with a Masters program because of these promises that turned out not to be valid. What now?

Correct..not fair. I still owe and really did not use my degree to the upmost. Very disappointed that we were not a part of the lawsuit. Need to look further in to it

The University also paid $50 million to the FTC as part of the settlement. The FTC will identify people who are eligible for a payment from the $50 million the University paid to the FTC. You don’t have to apply or submit a claim to get a payment. If you would like to get email updates about this settlement, please sign up here.

When is the FTC going to determine this? We are all drowning in debt here.

How will the FTC be determining eligibility for payment?

I enrolled 07/24/2014 yet because my debt is not owed directly to the school, I am not benefiting from the debt forgiveness. It would seem that considering those of us who still have thousands of dollars in debt due to Navient, should be considered as a priority.

I read somewhere that if your student loans are with the department of education you can apply directly with them to have discharged.

The Federal Student Aid Office of the US Department of Education has information about repaying student loans at www.StudentLoans.gov.

I did go through the DOE and they just said I wasn’t eligible. I have students loans from UOP a, but I enrolled in 2009. I also enrolled because of their advertising and working with some big name companies. The whole is not good. Plus they charge almost $400 over a credit for BSHCA. I can get my Masters for less. Somethings not right.

When will FTC identify people who also are eligible for payment? Will there be a date communicated? I personally submitted a forgiveness request, because I fall under the same group of people. Bow long does it take for us to get a response? The claim was submitted in Dec 2019.

Thanks!
Marco

The University also paid $50 million to the FTC as part of the settlement. The FTC will identify people who are eligible for a payment from the $50 million the University paid to the FTC. You don’t have to apply or submit a claim to get a payment. If you would like to get email updates about this settlement, please sign up here.

How was it decided who was a part of the settlement if you didn’t owe the school directly and had federal student loans? Was there a certain criteria to make one eligible for a portion of the settlement?

Just curious as to knowing if my debt will be paid. I have not received any update and this debt haunts me still because of this predatory and dishonest and institution. I need my debt relieved because it was created on false pretenses. I need answers NOW!

IMO this is not only defrauding individuals, but it is also scamming the government. They should be forced to pay back money they got from the DOE returning it to the Feds, who in turn should wipe some of that Federal Student loan stuff off the books for students took out Federal Student Loans. The corruption and graft in this country is incredible, and sadly students who in most cases are already working and supporting families are the targets.

It is not right that Federal Student Loans were not included. For me that was the only option I had was to apply for a Federal Student Loan as recommended by the UofP recruiter when I enrolled in 2013. I did not know there was an option to take a loan directly with the University of Phoenix.

When will the other 50 million be distributed to eligible students? Will we be informed beforehand by email or mail if we qualify for money? Is there a number I can call to see if I qualify?

No, there isn't a number you can call at the FTC to see if you qualify. If you would like to get email updates about this settlement, please sign up here.

I already subscribed but I haven't received any info about which students qualify for part of the 50 million dollar portion of the lawsuit. Can we contact UOP for this info?

I enrolled on Aug 29, 2012. I have one class on record some general class it says but they won't let me get an official transcript for my current school because they said I owe money. I do not owe any money, my loans were cancelled, and when I called they sent me to their collection dept because they were trying to find out my personal information. I just found out about this lawsuit because I was trying to figure out what to do. Please help.

Has anyone been paid out from the 50 million portion of the lawsuit. I recieved a letter months ago about this lawsuit but haven't heard anything since. When will the people eligible for a payout be paid?

I was also a victim of these ads and was enrolled prior to that date what happens for us with the same exact issue at UOP but before this date of enrollment?

Based in dealing with the borrowers defense program - we get nothing. No help, no repayment. Uop didn't admit to fraud so this settlement isn't evidence of wrong doing.

I was also a victim went university of Phoenix 2005 to 2008. Having obtained my Bachelor’s degree out the United States. I went to University of Phoenix believing that will change my career but that never happened. My MBA from the University of Phoenix is just a paper on my wall. What is worse I have incurred over 40k in student loan now over 80k including interest with zero prospect for a U turn in my career.

This is the exact thing that happened to me. I was enrolled at UOP 2009-2011. What do I need to do to get inthis lawsuit.

Under the settlement, the University will cancel $141 million in debts that are owed directly to the school by people who first enrolled at the school between October 1, 2012 and December 31, 2016. The University will cancel debts owed directly to the school whether they were charged as fees or some other kind of charge. The University will send a notice to each person whose debt to the school is being cancelled.

The University also paid $50 million to the FTC as part of the settlement. The FTC will identify people who are eligible for a payment from the $50 million the University paid to the FTC. You don’t have to apply or submit a claim to get a payment. If you would like to get email updates about this settlement, please sign up here.

Agreed. Also, I was never given any information on the cost per semester.

How will this effect G.I. Bill benefits? Will veterans be able to apply to get benefits restored?

The FTC doesn't have information now about how the settlement affects people's veterans' benefits. The settlement between the FTC and the University of Phoenix does not affect your private loans or federal government loans.

Under the settlement, the University will cancel $141 million in debts that are owed directly to the school by people who first enrolled at the school between October 1, 2012 and December 31, 2016. The University will cancel debts owed directly to the school whether they were charged as fees or some other kind of charge. The University will send a notice to each person whose debt to the school is being cancelled.

The University also paid $50 million to the FTC as part of the settlement. The FTC will identify people who are eligible for a payment from the $50 million the University paid to the FTC. You don’t have to apply or submit a claim to get a payment. If you would like to get email updates about this settlement, please sign up here.

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