University of Phoenix pays $ 190 million settlement
Many students will have their student loan debt canceled.
PHOENIX, Arizona – Note: This is an updated version of our original article which was posted on 09/25/2020 regarding loan cancellation. Federal and private loans taken out by students are not included in the FTC regulations.
With so many students now taking their courses remotely, many are turning to schools whose “focus” is online learning. But a number of those universities have been targeted by lawmakers accused of misleading students, including one of the largest, the University of Phoenix.
The university recently settled a lawsuit with the Federal Trade Commission over advertisements touting the school’s relationships with nearly 2,000 companies, which allegedly offered students the opportunity to obtain employment. That’s why the University of Phoenix was the perfect fit for Mark Bolaney. He would have access to large companies while learning online, a must since he is housebound.
“I was in a convalescent home,” Bolaney told 3News. “I had to learn to walk again after having 13 surgeries on my right leg and 11 surgeries to save my left leg.”
But that schooling came at a price: After being encouraged by counselors to go for three degrees so he could earn more money, he says all he got was 180,000 student loan debt. $.
“For my bachelor’s degree, they told me not to accept less than $ 35 an hour,” he recalls. “My masters, they told me not to take less than $ 65 an hour. And they told me for my PhD, you wouldn’t take anything below $ 100 an hour. “
Bolaney says he has submitted nearly 200 resumes for jobs as a result of his programs through the online school, including 17 positions at the university. However, he claims that they told him he was not qualified.
It was a similar story for Christina Baez, who says she went bankrupt after sinking $ 60,000 into the school.
“It could be a payment for a house or a down payment on a house,” Baez said in an interview.
It’s stories like these that have led the university to be the subject of several lawsuits over the years, including one by a former recruiter who claims the school forged loan documents for people. who were not entitled to assistance.
“We’ve been trained to say, ‘Hey, this is government money. This is free money. Bring them in. Get the sale,'” said Arthur Green.
More recently, the Federal Trade Commission got a settlement of $ 190,996,806 million from the school, claiming it deceived students with these ads, although the school did not admit doing anything wrong.
“They were implying that they had these connections in order to get jobs for their students and that they had those connections as part of the development of the program offered by the school, and we pretended that was not true. “FTC spokesperson Jon Steiger told us.
So what does this mean for students? Well the school has to pay $ 50 million which will go to the students aggrieved by the ads.
It is also writing off $ 141 million in debt owed to the University by students who first registered when these announcements ran. Although the regulations do not affect loans taken out by students through federal or private companies.
Unfortunately, Bolaney will not see this money. His loans were from a private company, so he’s still drowning in school debt.
“How can I recover six years of my youth? He asked, “I’m 52 now. Where am I going? Early retirement?”
The University of Phoenix issued the following statement:
“After fully cooperating with the FTC’s 5-year investigation, the University settled the matter to continue to focus on improving the lives of students through career-relevant higher education, and avoid any other distraction that might have resulted from a protracted litigation, not because we believe we did something wrong. This marketing campaign ran from late 2012 to early 2014, took place under a prior ownership and ended prior to the start of the FTC investigation. The University continues to believe that it acted appropriately and we have made several attempts to reach Mr. Bolaney in resolving part of its debt he owes directly to the University of Phoenix. We are hopeful that we can help him in this matter. “