The University of Phoenix,Ā the nationās largest for-profit college chains, agreed to a $191 million settlement for charges that the school had lured in students with fraudulent claims about partnerships with major companies that one of the chainās own executives had described as āsmoke and mirrors.āThe schoolās deceptions related to a marketing campaign that invoked A-list companies like Microsoft and Twitter, which affected students who enrolled between October 2012 and December 2016.
The Complaint filed a complaint in federal court in Arizona described the advertising campaign including a series of television ads and online postings from the university heralded its ācorporate partnershipsā with more than 2,000 employers, including the American Red Cross, AT&T and Yahoo. The ads said the school worked with those employers to āshape our curriculumā and ācreate optionsā for its graduates. In truth, the companies had no special hiring programs or curricular ties with the school, according to the F.T.C.ās complaint. One senior vice president at the school complained in an email that the use of the software company Adobe in advertisements was āsmoke and mirrorsā because the chain did business with the company but did not have any academic relationship with it.The complaint said the ads had prompted an executive at Staples, one of the featured companies, to send a note to the school asking, āWhat is Staples doing as part of this program?āThe school also made ādeceptive claimsā about employment opportunities in ads targeted at military veterans, the F.T.C. said.
The school undertook the campaign as its enrollment was falling. University of Phoenix was once the nationās biggest online university, with more than 460,000 students in 2010. But increased competition led to sharp drops in enrollment; the school now has around 97,000 students nationwide, and was sold in 2017 to Apollo Global Management, a private equity firm. The F.T.C.ās settlement, after an investigation that began more than four years ago, is the agencyās largest with a for-profit school. It previously settled complaints against two other chains, theĀ DeVry Education GroupĀ and theĀ Career Education Corporation, over what it said were false claims. For-profit colleges have been criticized for leaving students mired in debt for degrees that rarely led to well-paying jobs. A federal and state crackdown in the middle of the decade tightened regulations and pushed some of the largest chains into bankruptcy.