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The University of Phoenix, one of the nation’s largest for-profit online universities, has agreed to pay a $4.5 million settlement to resolve allegations of unlawful and deceptive recruitment practices targeting military students.
The settlement, announced on April 29, 2024, by the Federal Trade Commission (FTC), concludes a nearly decade-long investigation into the university’s recruitment tactics.
Background The FTC’s complaint alleged that the University of Phoenix misled prospective students about their potential for employment after graduating, as well as the costs associated with their degree programs.
The complaint specifically cited the university’s deceptive advertising campaigns targeting military and veteran students, which are particularly lucrative sources of revenue due to their access to federal education benefits.
Deceptive Recruitment Tactics
According to the FTC’s findings, the University of Phoenix employed a range of deceptive tactics to lure military students into enrolling in their programs.
These included:
- Falsely claiming that their courses were designed specifically for military students and would provide them with skills valued by prospective employers.
- Suggesting that their military recruitment staff were “trusted advisors” who would help guide students through the enrollment process, when in reality, they were compensated based on the number of students they recruited.
- Misrepresenting the university’s relationships with major companies and claiming that their degrees would provide students with a competitive advantage in the job market.
The University of Phoenix took advantage of military students and their families, luring them in with false promises about their educational offerings and the value of their degrees,
said FTC Bureau of Consumer Protection Director Samuel Levine.
This settlement should serve as a warning to other for-profit institutions that engage in deceptive marketing practices targeting military consumers.
Ongoing Scrutiny of For-Profit Colleges
The settlement is part of the FTC’s ongoing efforts to crack down on deceptive practices by for-profit colleges and universities, which have long been accused of prioritizing profits over student outcomes. In recent years, several high-profile for-profit institutions have faced investigations, lawsuits, and even closures due to concerns over their recruitment tactics, academic quality, and students’ ability to repay their loans.
Impact on Military Students
The settlement is particularly significant given the unique vulnerabilities of military students, who are often targeted by for-profit institutions due to their access to generous federal education benefits through programs like the G.I. Bill. Military students are also more likely to be first-generation college students and may lack the resources or support systems to navigate the complex world of higher education.
Conclusion
While the $4.5 million settlement represents a significant financial penalty for the University of Phoenix, critics argue that it may not be enough to deter similar behavior by other for-profit institutions.
Advocates for military students and consumer protection groups have called for stronger oversight and stricter regulations to prevent predatory recruitment practices and ensure that military students are able to access high-quality, affordable education.
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