The University of Phoenix and its parent company Apollo Education Group reached a $191 million settlement with the Federal Trade Commission (FTC), over charges that the for-profit college of deceived students.
Part of the settlement calls for students harmed by the school’s advertising to have their student loan debt forgiven with $141 million of the settlement being set aside for that specific purpose.
The FTC says the University misrepresented relationships it had with large employers and their influence in helping to get students jobs after graduation. They said the ads specifically targeted active military, veterans, and military spouses.
University of Phoenix and Apollo Education agreed to what is the largest settlement against a for-profit school without admitting to any wrongdoing. Under the terms, they will pay $50 million to the FTC, and $141 million to cancel student loan debts owed by former students.
For-profit colleges grew rapidly in the years following the last Great Recession when jobs were scarce. The practice of colleges promoting employment connections appears to have been widespread during the last decade.
In 2017, one study showed nearly 100,000 student loan borrowers claimed that they have been defrauded colleges and universities.