The University of Phoenix is currently running a nationwide advertising campaign that gives the impression to potential students that the institution is a public, state-operated school, when in reality it is a privately owned for-profit business. These ads appear to violate a settlement agreement made in 2019 with the Federal Trade Commission (FTC), in which the school’s owners agreed to refrain from any misleading advertising.
The text accompanying a video ad for the University of Phoenix on YouTube further contributes to this deception. It states, “Some state universities charge higher tuition to out-of-state students — but not University of Phoenix.” This sentence is ambiguous at best, as it could easily be interpreted to mean that the University of Phoenix is a state university, thus leading to further deception.
The accompanying video text continues, “Here, you’ll enjoy the same fixed, affordable tuition from the start to finish of your program, regardless of which state you live in.”
Viewers of these ads from the University of Phoenix may mistakenly believe that it is a state-run school and an affordable one at that. However, this is not the case. The school’s annual cost is $13,038, which is below the midpoint of $19,526 for all four-year schools, but still considerably higher than the average cost of in-state tuition at state schools, which is $10,423. Furthermore, by claiming that they do not charge out-of-state tuition, the University of Phoenix implies that they charge in-state rates.
Additionally, the University of Phoenix has a graduation rate of only 14 percent for its largest campus, meaning that for the remaining 86 percent who do not graduate, the school is far from a bargain.
There could be a motive behind the University of Phoenix’s deceptive advertising, beyond the desire to create the false perception of affordable tuition. State colleges generally have a better reputation compared to schools in the scandal-ridden for-profit college industry.
This deception is made even more troubling by the fact that the University of Phoenix has been caught deceiving students in the past and explicitly promised not to do so again.
In December 2019, the University of Phoenix and its parent company, Apollo Education Group, agreed to pay $191 million to settle charges brought by the FTC, accusing the company of engaging in deceptive practices through ads that falsely implied partnerships with companies like AT&T, Yahoo!, Microsoft, Twitter, and the American Red Cross. These partnerships were claimed to provide job opportunities for the students and tailor school programs accordingly.
This settlement was the largest financial agreement ever reached between the FTC and a for-profit college. As part of the agreement, the University of Phoenix neither admitted nor denied the claims made by the FTC. At the time of the investigation, Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, stated, “Students making important decisions about their education need accurate information, not fantasy job opportunities that do not exist.”
Under the settlement, the University of Phoenix agreed to a permanent injunction with the FTC, which included a specific obligation to refrain from making any misleading claims about the benefits or outcomes of their educational products or services. The statement “No out-of-state tuition” certainly sounds like a benefit.
The University of Phoenix has not responded to requests for comment regarding these recent allegations.
The University of Phoenix has a long history of deceiving, mistreating, and overcharging students, sometimes even breaking the law. The FTC should not overlook this latest instance of deception, as it represents a breach of the company’s legal commitment. Other federal government agencies, such as the Department of Education, the Department of Defense, and the Department of Veterans Affairs, should also not give any leniency to the University of Phoenix, considering that they have been providing billions of taxpayer dollars to this for-profit institution and entrusting the futures of individuals across the country to them, often with unfavorable outcomes. Due to their repeated violations, the University of Phoenix should be disqualified from participating in federal student aid programs.
