$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

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.

Any update about if anyone got through with federal student loan about getting a cancellation of debt ?

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?

Yes I received mine yesterday

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.

I enrolled in UOP 2008-2009 yr, for aacj & was 2 classes away from finishing, was told I had to pay $2k+ to them before I could take my last 2 classes b/c they weren't covered under my student loans. As a single mom of 3 I couldn't afford 2k out of pocket. They put it as debt owed & then my student loans were being consolidated after numerous forbearance & deferrments I find that I had 9 student loans. I have only ever applied for student loans & the Pell Grant 2x's. I got offset, I'm in a hardship & am now in a ibr for the loans. I did receive a letter that I answered when this case first started & replied to it (I was living in Ga). I have since moved states so what do I do now?

If you got a letter from the University, and need to update your address, please contact them. 

The University 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.

I did not get a letter and I not only graduated in 2012 I also exhausted all of my GI Bill with UoPH which I will never get to recuperate for a degree that I can actually use for a respectable MBA program. What do I need to do for assistance in this matter?

This was exactly my story as well. i needed 2 class to graduate and they messed me up. now i'm back in school and starting over and still owe over 40 k to uop and their degrees ain't worth zero! I don't know what to do.

Will there be any opportunities for financial relief for the students who didn’t not owe money directly to the university but other federal programs?

The University will pay also pay $50 million to the FTC.

The FTC will identify people who are eligible for a payment from the $50 million University of Phoenix settlement with 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.

Does this settlement ONLY apply to UOP or does it apply to other schools within The Apollo Group?

Is there a time frame for the FTC to decide how to distribute this $50 million?

Sadly, this was NOT just taking place in 2012-2016! This was happening when I was with U of Phoenix from 2005-2011! I hope that FTC will concentrate on those time periods too!

We need to start a new lawsuit. I wasn’t even able to finish my last 2 classes for student teaching due to them not having a clue as to what they were doing. After several contacts I was told to go back and take 26 more credit hours for the total of 150 for a BsED in Nm, but from arizona.

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

I have honestly spoken with UOP about this issue for years because I too was under the impression that UOP would offer or have great job leads after graduating. I have obtained two degrees in hopes for a better opportunity. To date I make 39k as an assistant at a staffing agency and all my years of experience with a Masters degree. The only thing UOP suggested is that I network more. It sucks that people who took federal aid are not affected by the settlement. I also, paid thousands out of pocket to graduate because my federal loans reached its aggregated limit.

I attended University of Phoenix for this reason and during this time frame. Who do I contact regarding this law suit or when should I expect a letter from the school regarding loan forgiveness?

Under the settlement between the FTC and the University of Phoenix, the University will cancel $141 million in debt that people who first enrolled between October 1, 2012 and December 31, 2016 owe directly to the school.  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 settlement between the FTC and the University of Phoenix does not affect students' private loans or federal government loans.

Is it possible to make a claim to cancel our debt from Federal loans that UOP was granted to pay tuition expenses?

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

What about the loans that were taken out with OTHER colleges, only to be told that the degree you were working towards was invalid because the chair at the college was working WITH UOP and that was the only location your credits would transfer to? Successfully junking nearly 2 years of credits and racking up thousands in student loan debt? Shouldn't both the college and UOP be held accountable for that?

I want to ask the same thing. I had to open a federal loan because UOP would not let me continue to take classes until I paid for the previous classes. Can we get reimburse for a class I paid on a credit card out of pocket?

How do affected students go about reclaiming funds paid as personal contributions long before September 30, 2019? If they're cancelling consumer debt to the university, I'd like to find out about being reimbursed for the almost $7,000 I have already paid out of pocket.

I attended UOP during this time and was charged a fees that I paid out of pocket will I be reimbursed for the money that I paid to them

I attended because of all the hype of using GI Bill at UOP. Does the settlement say anything about VA getting reimbursed? I believe they should and believe the VA will have a say soon. Hopefully this happens and VA simply credits the monthly equivalent to continue education.

The settlement also requires the University of Phoenix to pay $50 million to the FTC. We don't have information now to answer your specific question about reimbursement to the VA.

The FTC will identify people who are eligible for a payment from the $50 million University of Phoenix settlement with 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, please sign up here.

 

I need to know about Phoenix lawsuit with FTC who do I reach and can someone please contact me I just saw this on news recently. How can I reach someone from FTC. When will letters and or funds be sent out to everyone?

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 send a notice to each person whose debt to the school is being cancelled.

Also, the FTC will identify people who are eligible for a payment from the $50 million the University of Phoenix paid to the FTC as part of the settlement. 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.

Will there be any consideration for students who enrolled before 2012, and stayed within the program through 2016, under the pretenses that we would in fact qualify for an opportunity with large Fortune 500 organizations?

I guess my concern with the facts mentioned is that this settlement only covers debt "directly owed the school". I borrowed money directly with the help of the school and their employees who were directing where the money came from and who would be servicing that debt. If a person borrowed money with the help of the school's employees giving guidance as to how to accomplish this either through phone calls or emails, I would consider this to be debt that I owe to the school. I am quite certain that this is not the way this is going to turn out, but this settlement is a slap in the face to all students that saw these ads were greatly influenced by the perception that UOP was affiliated with any of these companies.

The settlement also requires the University to pay $50 million to the FTC.

The FTC will identify people who are eligible for a payment from the $50 million University of Phoenix settlement with 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, please sign up here.

I was a student 2010-2013 how does this apply to me? I was given false promises and mislead about the employment opportunities under the lawsuit.

Hello,

FTC, how do I place my name in this lawsuit, I was enrolled during this time and not only have my degree been frowned up , but I have not been able to get a job in my field after meeting with numerous companies they would bring to the campus. Not only that but I have 12 sets of loans that do not equal up and I was forced to attend online course at a discounted rate because we were put out of the campus building we were attending classes. We were told that when Sallie Mae was abolished we would have a freeze placed on our current interest rate if we agreed to continue our classes online and that didn't happen. We were promised employment and received nothing.
Thanks.

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.


I graduated in May 2012 with a bachelor in Business Management. I still owe the school, No real job offers came to me, only contract or contract to hire or customer service jobs. And then they kept sending me emails and pamphlets about going for my Masters, but not the areas I wanted. I have been deferring and forebearing student loan payments until I can land a fulltime job. Right now, I'm on a contract to hire job. I really feel like it was a waste of MY TIME and My Money or student Loan money that I Will have to pay back.
Seven years later, and I have still didn't land a worthwhile job that represented my hard efforts I put into that school.

They need to make some allowance for those of us who attended that school in 2012. I'd say all in all, I owe about $50k to 60K for attending that school. I always had to reapply for more money to continue.

I'm praying to get my letter to have part in that settlement.

Hi I also attended uop 2008-2012 and was also told I was going to get help finding a job with my degree after graduating and was also told that all my credits were transferable and that it was an accredited school and the degree was equal to any other reputable university... I feel like I was lied to and taken advantage of and ashamed and embarrassed I obtained a degree with no value ...how do we start a class law suit for students that were predated for years before 2012???

According to the UOPhoenix, this settlement will only apply to a very specific group of individuals, so for the rest of us, no one cares. I did official grievance with the UOP, went through my state for a grievance, and nothing. What I learned, the state agency person would call and talk to his contacts, and of course UOP was not at fault. University of Phoenix is still going to get away with what they have done; and people like me will still be paying on debts until they retire (even though the "education" received did not help, or improve my situation). Unfortunately, the FTC ruling was one more time of seeing how big business, in this case UOP, can get away with whatever. And, those of us that can barely afford the payments for loans, we will continue to pay. I thought UOP was going to be a way for me to reach higher goals, instead I learned that the debt is a way to keep me in my place, and that my state agency was more interested in the UOP, rather than in helping me.

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