Nearly $50 million is being sent to former University of Phoenix students following a settlement over accusations the school engaged in deceptive advertising, the Federal Trade Commission announced Wednesday.
The payout is part of a record $191 million settlement, reached in late 2019, over accusations the school ran ads that falsely claiming it had relationships with companies like AT&T, Yahoo!, Microsoft and Twitter, the FTC said.
The ads claimed that University of Phoenix could leverage its relationships with those major corporations to create job opportunities, shaping curriculum so that students would be best positioned for such jobs. But the school had no such relationships, the FTC said.
"This is the largest settlement the Commission has obtained in a case against a for-profit school,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist."
One University of Phoenix ad showed a woman trying to find a parking spot in a full 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," said a voiceover.
Cars in various spaces lift to show the company's logos, along with those of Avis, Twitter, MGM Resorts, AT&T and Microsoft.
"Not only that, we're using what we learned from these partners to shape our curriculum so that when you find the job that you want, you'll be the perfect fit," the ad continued.
The FTC alleged that UOP and its parent company, Apollo Education Group, specifically targeted prospective Hispanic and military students. Apollo Education Group has been the largest recipient of Post-9/11 GI Bill benefits, which pays tuition and fees on behalf of veterans or their dependents, according to the FTC.
In a statement to NBC News, a University of Phoenix spokesperson said the FTC's allegations concerned "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 statement 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."
In addition to the nearly $50 million in direct payments to more than 147,000 students, the $191 million settlement includes $141 million to cancel unpaid balances owed directly to the school by eligible students.
For the $50 million, the FTC is mailing 146,804 checks and issuing 677 PayPal payments to students who: enrolled at UOP between Oct. 15, 2012 and Dec. 31, 2016; paid more than $5,000 with cash, grants, federal and private student loans, or military benefits; 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.