FTC sends roughly $ 50 million in reimbursement to University of Phoenix alumni


  • The FTC is sending University of Phoenix students $ 50 million in refunds as part of a 2019 settlement.
  • The $ 191 million settlement also wrote off $ 141 million in unpaid balances owed directly to the school.
  • Federal and private student loans are not affected by the regulation, the FTC said.
  • See more stories on the Insider business page.

The Federal Trade Commission secured a record-breaking $ 191 million settlement with the for-profit University of Phoenix in 2019 over misleading marketing claims, and announced wednesday that it sends nearly $ 50 million in refunds to eligible students.

The FTC had sued the university for advertising partnerships with companies such as Yahoo and the American Red Cross which, in effect, had no school links at school. The university did not recognize any wrongdoing in the settlement, an FTC filing for a for-profit educational entity.

In Wednesday’s press release, the FTC announced it would send payments to more than 147,000 students “who may have been attracted to the allegedly deceptive advertisements.”

The refunds stem from an FTC lawsuit against UOP alleging that it used deceptive advertisements that falsely tout its relationships and employment opportunities with companies such as AT&T, Yahoo !, Microsoft, Twitter and the American Red Cross, ”the press release read. . “The FTC also alleged that the UOP advertisement gave the false impression that the online school was working with these companies to create employment opportunities for its students and to tailor its curriculum to those jobs.”

According to the press release, the FTC issues 146,804 checks and 677 PayPal payments to students who:

  • First registration at the school between October 15, 2012 and December 31, 2016;
  • Paid over $ 5,000 in cash, grants, loans or military benefits;
  • Did not obtain debt cancellation in the 2019 settlement;
  • And did not withdraw from college by providing his contact details to the FTC.

The statement added that in addition to the nearly $ 50 million in repayments, the $ 191 million settlement included $ 141 million to write off unpaid balances owed directly to the school, but other debts, including federal and private student loans are not affected by the settlement.

A spokesperson for the University of Phoenix told Insider that the FTC’s allegations “relate to a campaign that ended in 2014 that was not tested through litigation and does not constitute claims. factual findings of the FTC or court “.

“The University has not admitted any wrongdoing and continues to believe that it acted appropriately,” the spokesperson said. “This settlement agreement has allowed us to continue to focus on our core mission of improving the lives of our students through career-relevant higher education, and to avoid any other distractions of serving students that may have resulted protracted litigation. “

The University of Phoenix is ​​one of many for-profit schools accused of defrauding students and putting them in debt. Since 2015, more than 200,000 defrauded borrowers requested a full discharge of their loans, and last week President Joe Biden’s Education Secretary Miguel Cardona canceled $ 1 billion in student loans for about 72,000 defrauded borrowers, all of whose claims were pending when Biden took office.

“Borrowers deserve a simplified and fair remedy when they have been harmed by the bad conduct of their institution,” Cardona said in a statement. declaration. “Careful examination of these claims and the associated evidence has shown that these borrowers have been wronged and we will give them a fresh start on their debt.”

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