University Of Phoenix Reaches $191 Million Settlement With FTC

Joe: 106.7 WIZN. That’s Lynyrd Skynyrd, “What’s Your Name”. Heard Twisted Sister before that. Joe Vega here with you on your Wednesday rocking ride home. Called my friend Ben Barry from Martin, Harding & Mazzotti to talk about this University of Phoenix settlement. Ben, how are you?

Ben: Joe, how you doing?

Joe: I’m good. So, I wanted to talk to you about this University of Phoenix settlement, $191 million that the Federal Trade Commission has levied against them, and it’s in regards to what they’re calling deceptive practices. And I just was curious, like, what does that entail?

Ben: Basically, the Federal Trade Commission had done an investigatory probe into the University of Phoenix along with other institutions of higher learning who were alleged to have been deceptively advertising what they were delivering as an institution of higher education. And so, basically, the conclusion was that some of these universities, the University of Phoenix, I think ITT Tech was involved, DeVry University, there are a number of other institutions as well. And in this particular case on Tuesday, the University of Phoenix agreed to cancel a large portion of student debt for individuals who were enrolled in certain years, about $140 million in debt, and also pay to the Federal Trade Commission $50 million to be dispersed back to those students or to be done with whatever the Federal Trade Commission determines as appropriate.

Joe: So, do you know what was it that they were promising that was, you know, worth $141 million?

Ben: Well, a number of things. Initially, it was how their program was developed. The University of Phoenix was alleging that it had developed specific programs that would increase the likelihood of placement in private industry. For example, they might say their aeronautical department had been designed by Boeing, and that clearly wasn’t true. And so, the deception that was perpetrated to the students was that this university had a program, they had a shoo-in for subsequent employment, and that ultimately encouraged the students to pay the money, take out the loans, go to the college, get the degree, and then hope for that job, which they ultimately didn’t get because the University of Phoenix actually did not have the connection, it did not have the program designed for that particular application. And so, they perpetrated this lie that encouraged people to sign up for their program and they could not deliver on the other side of the rainbow, which is the promising job with upward mobility, and security, and all this other stuff.

Joe: Right. And this isn’t the first time that they’ve had settlements against them in that regard.

Ben: It’s not, and it’s not the only university to be involved in this sort of advertising scheme. And it’s probably not gonna be the last university. The reality of it is is that individuals choose schools based on the programs that they offer, how those programs are developed, and then what their prospects are for further placement in jobs or furthering their education and going onto doctorates and master’s degrees. When a university lies about what it can offer and how it can facilitate that person’s trajectory, that’s what the problem is. And when people reasonably rely on those representations and those representations are fictitious, that’s where we have a problem, that’s what University of Phoenix is dealing with, that’s what ITT and DeVry are dealing with, along with a couple of other universities. And there have been universities in the past that have already paid out, closed their doors, and are no longer operational.

Joe: All right. So, be very wary of University of Phoenix. Thanks, Ben.

Ben: Thank you, Joe.

Joe: Ben Barry from Martin, Harding & Mazzotti. You can call him at any time at 1-800-LAW-1010 or go online to Mel Allen taking over from here. He’s got music from Steve Miller and Def Leppard next.