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University of Phoenix to cancel $141 million in student debt in settlement over deceptive ads

By LEADA GORE | (Birmingham) Alabama Media Group | Published: December 11, 2019

BIRMINGHAM, Ala. (Tribune News Service) — The University of Phoenix has agreed to pay $50 million and to cancel some $141 million in student debt as part of a settlement related to deceptive advertisements.

Announced by the Federal Trade Commission, the deal is the agency’s largest against a for-profit college. It comes after the FTC said University of Phoenix and its parent company, Apollo Education Group, used deceptive advertising to tout relationships and job opportunities with major companies such as AT&T, Yahoo, Microsoft and Twitter.

Those relationships didn’t exist, the FTC said.

“Students making important decisions about their education need the facts, not fantasy job opportunities that do not exist,” Andrew Smith, Director of the FTC’s Bureau of Consumer Protection said.

In addition to falsely touting relationships with those companies, University of Phoenix also misrepresented that companies, including Adobe, MGM, Rubbermaid and Sodexo, worked with the school to develop its courses.

The deceptive ads targeted military and Hispanic consumers, the FTC said.

The $50 million portion of the settlement will go toward consumer redress. The student loan forgiveness will go toward those students who first enrolled during the time period consumers likely were exposed to the advertisements.

Eligible students will receive letters informing them that the debt has been canceled.

In a statement, University of Phoenix said the settlement is related to a single ad campaign that ran from 2012 to 2014.

“The campaign occurred under prior ownership and concluded before the FTC’s inquiry began. We continue to believe the university acted appropriately,” the company said.

You can see an example of one of the ads here:

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