University of Phoenix put out another fire. But can it rise from its ashes again?

The for-profit University of Phoenix will pay out a $191m settlement with the FTC for misleading advertising between 2012 and 2016.


December 13, 2019

The University of Phoenix recently agreed to a $191m settlement with the Federal Trade Commission after it was accused of advertising so fraudulent that even the university’s own executives described it as “smoke and mirrors.”

As part of the settlement, the once-massive for-profit university will pay a $50m penalty to the FTC and cancel $141m of debts owed by students who enrolled in the university between 2012 and 2016.

What, exactly, happened? 

According to a complaint the FTC filed, in 2012 the university started running TV and online ads touting “corporate partnerships” with companies including Twitter, Microsoft, Yahoo, and AT&T.

But, as Twitter and other companies are quick to point out, those “partnerships” never actually existed.

So… why so spurious?

The U. of Fee-nix stretched the truth because it was desperate to increase attendance.

Enrollment peaked at Phoenix in 2010 with more than 460k students. Enrollment has fallen to 97k students.

On top of that, its physical campuses have dwindled from a high of more than 500 to just a few dozen.

Now, Phoenix’s fortune could go up in flames

In a fact sheet issued as a part of the settlement, the university — which has been owned by the private equity firm Apollo Global Management since 2017 — stated: “We are committed to responsible marketing.”

The university also said it “continues to believe it has acted appropriately.” 

Still, this wouldn’t be the first time feisty Phoenix has been called out for malfeasance and survived in spite of failing to change its ways: The university has paid out fines and settlements for past wrongdoings in 2000, 2003, 2004, and 2009.

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.