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University of Phoenix students to get $50 million in tuition refunds

Getting disadvantaged students to elite colleges
Getting disadvantaged students to elite colleges 04:21

Thousands of University of Phoenix students will split nearly $50 million in tuition refunds because they were allegedly lured into enrolling in the for-profit school by deceptive advertisements.

The Federal Trade Commission said the money will go to more than 147,000 Phoenix students who enrolled at the University of Phoenix between October 2012 and December 2016, paid more than $5,000 in tuition and continue to have student debt from attending the for-profit college.

The $50 million is part of a larger $191 million lawsuit settlement the FTC announced more than a year ago. In the settlement, University of Phoenix then-parent company Apollo Education Group agreed to use $141 million in forgiving student loans. The remaining $50 million went directly to the FTC, and the commission is now passing that money to students. 

Students who get their refund via PayPal have 30 days to accept the money, the FTC said. People who get mailed checks should deposit them within 90 days. 

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The FTC filed a lawsuit in December 2019 against the University of Phoenix, arguing that the online school created television and radio ads that hinted at partnerships with Microsoft, Adobe and Yahoo. The ads gave the false impression that university officials worked with those companies and others to arrange jobs for their students, regulators alleged. The television ads ran from late 2012 to early 2014.  

In one television ad, actress Phylicia Rashad narrates as a prospective student navigates through a crowded campus parking lot. In the scene, parked cars are lifted out of their spaces and replaced with logos of major companies and Rashad says "At University of Phoenix, we're working with a growing list of almost 2,000 corporate partners, companies like Microsoft, American Red Cross and Adobe, to create options for you." 

The school ultimately consented to pay $191 million, an agreement one FTC official called "the largest settlement the commission has obtained in a case against a for-profit school." 

A University of Phoenix spokesperson told CBS MoneyWatch Thursday that it did not admit wrongdoing and believed that its advertisements were appropriate. The school said in a statement the $191 million will not have a significant financial impact on its operations.  

"The FTC made allegations concerning a campaign that ended in 2014 that were not tested through litigation, and do not constitute factual findings by either the FTC or any court," a university spokesperson said. 

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