NEW: Univ. of Phoenix and its parent company have agreed to pay $50M in cash and cancel $141M in student debt to settle allegations of deceptive advertisement brought by the Federal Trade Commission.
Apollo Education Group owns the University of Phoenix. The Arizona-based for-profit college chain has 55 campuses across the nation and teaches thousands of students through its online programs. It's the nation's largest recipient of GI Bill tuition benefits for military veterans.
In one TV ad that aired in 2012, a frustrated driver weaves through a crowded parking lot looking for a space. As a narrator notes that the University of Phoenix works with companies “to create options for you," cars are suddenly lifted out of parking spaces and replaced with logos for companies including Microsoft and the American Red Cross.
Instead, many of the companies touted as corporate partners were actually part of the University of Phoenix's"Workforce Solutions” program that provided discounted tuition to their employees in exchange for the companies' help promoting the school. Even some senior officials at the University of Phoenix took issue with the ads. In 2012, a senior vice president complained to the chief marketing officer that using Adobe in the parking lot ad was “smoke & mirrors,” investigators found. “They are not a partner,” the vice president wrote. “We may do business with them, but nothing academically."
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