FTC reaches $191 million settlement with University of Phoenix in deceptive-advertising probe – The Washington Post
The for-profit behemoth University of Phoenix will cancel millions of dollars in debt owed by students and pay restitution to resolve allegations of deceptive advertising, the Federal Trade Commission said Tuesday.
Phoenix must pay the FTC $50 million, which will be used to compensate former students. It must also forgo collection of about $141 million in debts owed directly to the school by people who attended between 2012 and 2016. Eligible borrowers will receive notification from the university, according to the commission.
“This is the largest settlement the Commission has obtained in a case against a for-profit school,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist.”
Investigators say the University of Phoenix ran an advertising campaign that featured Microsoft, Twitter, Adobe and Yahoo, giving a false impression the school worked with those companies to employ its students. There was no such partnership, according to the FTC, a charge the university disputes. The commission also alleges the university falsely claimed it worked with a host of companies — including the American Red Cross, Rubbermaid and AT&T — to develop courses.