U of Phoenix to cancel debt for students harmed by ads

PHOENIX – The University of Phoenix has agreed to a $191 million settlement with the Federal Trade Commission over claims that students were harmed by deceptive advertising, the commission announced Tuesday.

The University of Phoenix and its parent company, Apollo Education Group, faced FTC charges that claimed the school had “used deceptive advertisements that falsely touted their 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 settlement money includes $50 million in cash and $141 million to cancel debt for students who were harmed by the deceptive ads, the FTC said.

The university did not admit any wrongdoing as part of the settlement.

The university is based in Phoenix and had nearly 100,000 students last year. Students primarily take classes online. The school was owned by a publicly-traded company from 1994 to 2016, when it was sold to private investors. At its peak, the school had more than 470,000 students.

The commission’s complaint and stipulated final order, which was approved by commissioners, will be filed in federal court in Arizona, the FTC said. Stipulated final orders from the commission have the force of law after they are approved and signed by a district court judge.

The university noted that the settlement involved “a single advertisement campaign that ran from late 2012 to early 2014 and occurred under prior ownership.”

Students who have outstanding debts owed directly to the university and who were first enrolled between Oct. 1, 2012, and Dec. 31, 2016, will be able to have those debts forgiven, the university said.