University of Phoenix Students Eligible for Share in $50m Settlement Fund

Ryan J. Farrick — March 26, 2021

The FTC headquarters in Washington, D.C. Image via Flickr/user:Postdlf. (CCA-BY-3.0).

The University of Phoenix was accused of engaging in deceptive marketing practices to attract students.

Thousands of University of Phoenix students are now eligible to claim their share of a $50 million fund set up by the federal government.

According to CBS News, the University of Phoenix and its parent company, Apollo Education Group, agreed last year to pay the Federal Trade Commission upwards of $190 million. As part of the agreement, the for-profit college promised to put $141 million towards student loan forgiveness, with the remaining $50 million passed on to the FTC.

Since the settlement was announced a year ago, the FTC has decided to put the $50 million towards a fund for students who fell victim to the University of Phoenix’s deceptive marketing tactics.

“The refunds stem from a lawsuit the FTC filed against UOP alleging that it used deceptive advertisements that falsely touted its relationships and job opportunities with companies such as AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross,” the FTC said in a press release. “The FTC also alleged that UOP’s advertising gave the false impression that the online school worked with those companies to create job opportunities for its students and tailor its curriculum for such jobs.”

Gavel resting on open book; image by verkeorg, via Flickr, CC BY-SA 2.0, no changes.

Students who have already received tuition refunds via PayPal will have a month to accept their share of the settlement, while students who are receiving checks by mail should cash or deposit them within 90 days.

CBS News recounts how the University of Phoenix had run aggressive marketing campaigns, airing radio and television advertisements which suggested job-placement partnerships with high-profile companies such as Microsoft, Adobe, and Yahoo.

These ads, notes CBS, ran for almost two years between 2012 and 2014.

In one such advertisement, an actress narrated a scene wherein a prospective University of Phoenix walked through a parking lot. In the scene, the cars lifted out of their spaces, replaced by the logos of major brands.

“At University of Phoenix,” the narrator says, “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.”

In reality, the University of Phoenix did not have any tangible job-placement programs with the companies.

Somewhat ironically, many University of Phoenix graduates later reported that their degrees seemed detrimental to their career prospects, with employers tending to view Phoenix graduates in a poor light.

However, the University of Phoenix has defended its marketing practices and maintains that its advertisements were truthful, legal, and appropriate.

“The University has admitted no wrongdoing and continues to believe it has acted appropriately,” a University of Phoenix spokesperson said. “This settlement agreement has enabled us to continue our focus on our core mission of improving the lives of our students through career-relevant higher education, and to avoid any further distraction from serving students that could have resulted from protracted litigation.”