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University of Phoenix students to get $50 million in refunds as part of legal settlement

March 25, 2021
The Federal Trade Commission had sued the online university, alleging that it engaged in deceptive advertising.

More than 147,000 University of Phoenix students will receive refunds as part of a Federal Trade Commission settlement over allegedly deceptive advertisements.

The FTC says it is sending payments totaling nearly $50 million to students who may have been lured by the misleading ads to enroll at the online university.

The refunds stem from a lawsuit the FTC filed against the University of Phoenix 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 also alleged that the university’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.

In agreeing to the settlement, the University of Phoenix admits no wrongdoing.

“The FTC made allegations 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," says Andrea Smiley, vice president for public relations at the university. "The University has admitted no wrongdoing and continues to believe it has acted appropriately. 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 for some students, the $191 million settlement includes the cancellation of $141 million in 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 this settlement.

The FTC is mailing payments to students who:

  • first enrolled in a masters, bachelors, or associates degree program at the University of Phoenix between October 15, 2012, and December 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 this settlement; and
  • did not opt out of letting University of Phoenix provide the student’s contact information to the FTC.

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