In 2017, the University of Phoenix settled a $191 million lawsuit with the Federal Trade Commission after they were accused of deceptive advertising. Students claimed that UOP promised future employment with large companies such as AT&T, MGM, Twitter, and Microsoft. The university canceled $141 million of student debts to settle the complaint. Despite the lawsuit, UOP has failed to improve its graduation rate and its marketing campaign invokes A-list companies.
UOP’s graduation rate is atrocious
When it comes to graduation rates, UOP has a pretty good record. While this is not the case for all universities, theirs is one of the highest in the country. That is not to say that all graduates are below average; the rate is merely indicative of the overall quality of education. UOP’s graduation rate is higher than the national average of 25.9%. But this does not mean that UOP has an inferior educational system.
While every university has its share of transferrers, not every university has a graduation rate that is nearly 20 percent below the national average, and it’s nowhere near the bottom of the pack in Ohio. Despite this low graduation rate, no one intended to trash UOP. While a community college focused on first-time, full-time students have a higher graduation rate, it does not make sense to compare the UOP graduation rate to that of the community college next door. Using NCES metrics is a flawed method and fails to account for differences in institutional goals and student populations.
For-profit university’s marketing campaign invokes A-list companies
In a complaint filed with the Federal Trade Commission, the FTC claimed that a for-profit university made deceptive claims about its corporate partnerships, including one with Adobe. In reality, the university had no academic relationship with Adobe, and its advertisements portrayed students as aspiring engineers or IT professionals with a wide variety of job options. The FTC said that such claims reflected the school’s deceptive marketing strategy.
The marketing campaign of a for-profit university has become a household name. Recruiters allegedly call veterans’ hospitals and wounded warrior centers and promise to cover their tuition, but investigators said the recruiters were deceiving service members by claiming the military would pay for their education. In the past, federal and state regulators imposed tougher regulations to address the issue, resulting in some of the largest chains going bankrupt. Now, however, the Trump administration is undoing those regulations.
Students’ lawsuits held up money for UOP
Part of the $191 million settlement involving the University of Phoenix was held up by a class-action lawsuit filed by students. The lawsuit claimed that the company made misleading claims about its connections with employers and companies while presenting a false picture of employment prospects. While the company will now pay a portion of the settlement to students, another $50 million was allocated directly to the Federal Trade Commission. Now, that money is flowing to students who enrolled in the school. Students who received a check by email or through PayPal have 30 days to deposit it before it expires. Those who received a check in the mail should deposit the money within 90 days.
The University of Phoenix has agreed to settle the suit and will pay $191 million to pay off student loans. The lawsuit filed by the Federal Trade Commission alleged that the school misled students by advertising that promised employment opportunities after graduation. The advertisements portrayed students as earning lucrative salaries, but those were not real. The school had also falsely advertised that it partnered with Microsoft, AT&T, and the American Red Cross. The lawsuit also alleged that the school used misleading advertising to promote the school’s programs and services.
Students’ claims for loan cancellation have stalled
The Department of Education’s recent decision to deny student loans has severely impacted the lives of thousands of students. It has also severely restricted their access to federal student aid. The Department of Education has even used extraordinary extrajudicial powers to levy garnishments on students’ wages and take away their tax credits. In response, the Named Plaintiffs filed a lawsuit under the Administrative Procedure Act on behalf of all former students whose loan cancellation claims have been denied.
Earlier this year, students’ claims for loan cancellation have come to a halt, as the Obama administration’s Borrower Defense to Repayment rule is no longer in effect. Now, students’ claims for loan cancellation have stalled, but there’s still time to take action. By filing a Borrower’s Defense Against Repayment Application, students can argue that the University of Phoenix falsely advertised its graduation rates and job placement statistics. While this settlement is still in its early stages, the Department of Education has promised to email eligible students soon, so borrowers should pay attention and submit their BDAR requests as soon as possible.