University of Phoenix students to receive $50M in tuition refunds as part of 2019 FTC settlement
The $191M settlement also includes $141M to cancel unpaid balances owed directly to the school by eligible students
The Federal Trade Commission is sending nearly $50 million in refunds to more than 147,000 University of Phoenix students as part of a $191 million settlement from 2019.
The regulator is mailing 146,804 checks and issuing 677 PayPal payments to students who first enrolled in a masters, bachelors, or associates degree program at UOP between October 15, 2012 and December 31, 2016, and paid more than $5,000 with cash, grants, federal and private student loans, or military benefits.
"This is the largest settlement the Commission has obtained in a case against a for-profit school,” Andrew Smith, the 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."
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The settlement includes $141 million to cancel unpaid balances owed directly to the school by eligible students. Other debts, such as federal and private student loans or military benefits, are not affected by the settlement.
Students eligible for relief will also include those who did not get debt cancellation as part of the settlement and did not opt out of UOP providing the student's contact information to the FTC.
Indivudals who get a refund via PayPal will have 30 days to accept the payment. Those who receive checks should deposit or cash their checks within 90 days.
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According to the FTC, the payments stemmed from a previously filed lawsuit by the FTC, which alleged that the university's television and radio advertisements "falsely touted its relationships and job opportunities" with companies including as AT&T, Adobe, Microsoft, Twitter, and the American Red Cross beginning in 2012.
The agency further alleged that University of Phoenix (UOP) and its parent company, Apollo Education Group, claimed the curriculums were tailored to give students a better chance to secure a job with these companies.
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"In reality, these companies did not partner with UOP to provide special job opportunities for UOP students or develop curriculum," the FTC stated in the suit. "Instead, UOP and Apollo selected these companies for their advertisements as part of a marketing strategy to drive prospective student interest."
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A spokesperson for University of Phoenix told FOX Business in a statement that the allegations made by the FTC were "concerning a campaign that ended in 2014 that were not tested through litigation, and do not constitute factual findings by either the FTC or any court."
"The University has admitted no wrongdoing and continues to believe it has acted appropriately," the spokesperson added. "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.”
University of Phoenix is one of multiple for-profit schools that have been accused of defrauding its students and leaving them with debt. Since 2015, more than 200,000 defrauded borrowers have filed for a complete discharge of their loans.
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The FTC's announcement comes a week after President Joe Biden's education secretary, Miguel Cardona, cancelled $1 billion in student debt for approximately 72,000 defrauded borrowers, whose claims were pending when Biden took office.
“Borrowers deserve a simplified and fair path to relief when they have been harmed by their institution’s misconduct,” Cardona said in a statement. “A close review of these claims and the associated evidence showed these borrowers have been harmed and we will grant them a fresh start from their debt.”