The encyclopedia · Advertising & PR · Marketing decision · 2019
University of Phoenix advertised fake employer partnerships — FTC settled for $191M
Ads promised Microsoft, Twitter and Adobe hired its grads. The FTC called the 'partnerships' marketing props and settled for $191 million.
University of Phoenix · Apollo Education Group · 2019-12-10
What happened
The University of Phoenix built an ad campaign, including the 'Let's Get to Work' push, on employer ties. Ads told prospective students that companies including AT&T, Yahoo!, Microsoft, Twitter, Adobe and MGM had partnered with the school — 'actively hiring' its graduates, tailoring its curriculum to their jobs.
The FTC said the relationships were mostly marketing arrangements chosen 'as part of a marketing strategy to drive prospective student interest.' Its December 10, 2019 announcement called the settlement — $50 million in cash plus $141 million in debt cancellation — 'the largest settlement the Commission has obtained in a case against a for-profit school.' The agency also said the ads targeted military service members, veterans and their families, and Hispanic consumers; UOP had been 'the largest recipient of Post-9/11 GI Bill benefits since the program's inception.'
For students who enrolled from October 2012 through the end of 2016, the order cancelled debts owed to the school and returned cash. The case followed the FTC's $100 million settlement with DeVry in 2016, and it carried the same charge in larger form: enrollment marketing that sells outcomes the school cannot deliver.
Why it happened
- The campaign sold a specific outcome — a job at a named employer — that the school's actual relationships did not support.
- Advertising a 'partnership' for its marketing value rather than its substance is the core of the deception, the FTC argued.
- The ads leaned hardest on the audiences least able to check the claims: military families and Hispanic students.
- Debt cancellation as the remedy matched the harm: students paid tuition on the strength of a promise the ads had invented.
The lesson
A named employer in an ad is a promise, whether or not marketing called it one. If the 'partnership' is a prop for lead generation, the tuition bill will be the regulator's exhibit.
Aftermath
Apollo Education Group had already taken the school private in 2017; the settlement became a benchmark in FTC enforcement against for-profit education, cited alongside the DeVry case. The debt relief reached students who enrolled during the deceptive-advertising period, and the agency's largest for-profit-school settlement at the time stood as the marker for what enrollment advertising may not promise.
Sources
- FTC press release, 10 December 2019 — FTC Obtains Record $191 Million Settlement with University of Phoenix to Resolve FTC Charges It Used Deceptive Advertising
- NPR, 10 December 2019 — University Of Phoenix Reaches $191 Million Settlement With FTC, Including Debt Relief
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