x
Breaking News
More () »

Maine's Leading Local News: Weather, Traffic, Sports and more | Maine | NewsCenterMaine.com

University of Phoenix pays one of the largest school settlements in history

Many students will have their student debt forgiven.
University of Phoenix

PHOENIX, Arizona — Note: This is an updated version to our original story that was published on 9/25/2020 regarding loan forgiveness. Federal and Private loans taken by students are not included in the FTC settlement.

With so many college students now taking their classes remotely, many are looking at schools whose "focus" is online learning. But a number of those universities have been targeted by lawmakers accused of misleading students, including one of the biggest, the University of Phoenix. 

The university recently settled a lawsuit with the Federal Trade Commission over advertisements that touted the school’s relationships with nearly 2,000 companies which would provide opportunities for students to get jobs. It's why the University of Phoenix was the perfect fit for Mark Bolaney. He'd have access to major companies while learning online, a must because he’s homebound.

"I was in a convalescent home,” Bolaney told 3News. "I had to learn how to walk again after having thirteen surgeries on my right leg and 11 surgeries to save my left leg."

But that schooling came at a premium:  After being encouraged by counselors to go for three degrees so he could earn more money, he says all he ended up with was $180,000 in student debt.

"For my Bachelor's degree, they told me not to accept less than $35 an hour," he recalled. "My Master's degree, they told me not to accept less than $65 an hour. And they said for my Doctorate, you're not going to want to accept anything under $100 an hour."

Bolaney says he sent nearly 200 resumes for jobs following his programs through the online school, including 17 positions at the university. However, he claims they told him he wasn’t qualified.

It was a similar story for Christina Baez, who says she went broke after sinking $60,000 into the school. 

"That could be a house payment or a down payment on a house," Baez said in an interview.

It’s stories like these that led to the university being the focus of multiple legal actions over the years, including one by a former recruiter who claims the school falsified loan documents for people who didn't qualify for aid.

"We were trained to say, ‘Hey, this is government money. This is free money. Get them in. Get the sale.'" Arthur Green said.

Most recently, the Federal Trade Commission obtained a $190,996,806 million dollar settlement from the school claiming it deceived students with those ads, although the school didn't admit they did anything wrong.

"They were implying that they had those connections in order to get their students jobs and that they had those connections as part of developing the curriculum that the school offered, and we alleged that wasn't true," FTC spokesperson Jon Steiger told us.

So what does this mean for students? Well, the school's on the hook for $50 million dollars which will go to students harmed by the ads.

It's also cancelling $141 million dollars in debts owed to the University by students who first enrolled when those ads ran. Although the settlement does not affect loans taken by students through federal or private companies. 

Unfortunately, Bolaney's not going to see any of that money. His loans were from a private company, so he's still drowning in school debt.

"How do I get back six years of my youth?" he asked "I'm 52 now. Where do I go? Retirement early?"

The University of Phoenix released the following statement:

"After cooperating fully with the FTC’s 5-year long inquiry, the University settled the matter to maintain focus on improving the lives of students through career-relevant higher education, and avoid any further distraction that could have resulted from protracted litigation, not because we believe we did anything wrong. This marketing campaign ran from late 2012 to early 2014, occurred under prior ownership and concluded before the FTC’s inquiry began. The University continues to believe it has acted appropriately and we have repeatedly tried to reach Mr. Bolaney to resolve the portion of his debt that he owes directly to University of Phoenix. We remain hopeful we can assist him with this matter."