U.S. Senate Majority Whip Dick Durbin (D-IL), along with U.S. Senators Richard Blumenthal (D-CT), Jeff Merkley (D-OR), Maggie Hassan (D-NH), Sherrod Brown (D-OH) and Elizabeth Warren (D-MA), today sent a letter to Secretary of Education Miguel Cardona, Secretary of Defense Lloyd Austin, and Secretary of Veterans Affairs Denis McDonough warning the agency leaders about the predatory for-profit college University of Phoenix’s (Phoenix) latest tactics to recruit students using misleading advisements. The letter also asks the agency leaders to scrutinize Phoenix’s participation in federal student aid programs, including the Department of Education’s (ED) Title IV program, the Department of Veterans Affairs (VA) GI Bill, and the Department of Defense’s (DOD) Tuition Assistance program given the for-profit college’s history of scamming students.
The Senators began their letter by shedding light on Phoenix’s newest advertising campaign that falsely suggests that the for-profit school is a public university despite the school’s high tuition and abysmal graduation rate of 14 percent at its main and largest campus.
“Phoenix is an unscrupulous and predatory for-profit college that has long preyed on veterans, low-income students, and students of color. A recent report found that Phoenix has launched a national advertising campaign that has run misleading advertisements suggesting Phoenix is a public university. These advertisements, including messages on its admissions website, tout statements such as ‘No out of state tuition’ and ‘Some state universities charge higher tuition to out-of-state students – but not University of Phoenix.’ Prospective students easily could interpret these misleading statements to mean that Phoenix is an affordable public university, when in reality it is neither,” the Senators wrote.
The Senators went on to emphasize that Phoenix has been pushing these ads even after it reached a $191 million settlement with the Federal Trade Commission (FTC) as a consequence for previously running false ad campaigns. Despite the settlement also including an injunction on running deceptive ads, Phoenix is continuing to peddle these misleading advertisements to entice students to enroll.
“In 2019, Phoenix reached a $191 million settlement with the FTC for running deceptive advertisements that gave the false impression that Phoenix partnered with major employers like the American Red Cross, AT&T, Microsoft, Twitter, and Yahoo. This was the largest financial settlement ever reached between the FTC and a for-profit college. The settlement also stipulated that Phoenix is banned permanently from running advertisements that promote a misleading benefit,” wrote the Senators.
“Phoenix’s most recent advertising campaign clearly defies this injunction,” the Senators continued.
The Senators concluded the letter by calling on the federal agencies to protect students from enrolling at Phoenix, which has historically siphoned taxpayer dollars without providing attendees with a meaningful degree, by scrutinizing Phoenix’s access to federal student aid programs.
“We applaud ED’s recent efforts to hold for-profit colleges accountable, including developing a low-financial-value programs list and providing borrower defense to repayment discharges for students who attended Corinthian Colleges, ITT Technical Institute, and Westwood. ED, VA, and DOD, however, can and must take additional steps to protect student borrowers and taxpayers by scrutinizing Phoenix’s participation in federal student aid programs, especially after clear violations of its previous agreement with the FTC,” the Senators concluded.
Full text of the letter is available here and below:
May 3, 2023
Dear Secretaries Cardona, McDonough, and Austin:
We write to urge the Department of Education (ED), Department of Veterans Affairs (VA), and Department of Defense (DOD) to scrutinize the University of Phoenix’s (Phoenix) participation in federal student aid programs, including ED’s Title IV program, VA’s GI Bill, and DOD’s Tuition Assistance program.
Phoenix is an unscrupulous and predatory for-profit college that has long preyed on veterans, low-income students, and students of color. A recent report found that Phoenix has launched a national advertising campaign that has run misleading advertisements suggesting Phoenix is a public university.[1] These advertisements, including messages on its admissions website, tout statements such as “No out of state tuition” and “Some state universities charge higher tuition to out-of-state students – but not University of Phoenix.” Prospective students easily could interpret these misleading statements to mean that Phoenix is an affordable public university, when in reality it is neither. According to the National Center for Education Statistics, Phoenix charged $13,245 in the 2020-2021 academic year, which is well above the average cost of $10,423 at a public university or college. Furthermore, Phoenix’s dismal graduation rate of 14 percent at its main and largest campus is an obvious sign that this predatory college leaves students with significant student debt and no degree to show for it.
Phoenix’s deceptive misrepresentations unfortunately are not new. In 2019, Phoenix reached a $191 million settlement with the Federal Trade Commission (FTC) for running deceptive advertisements that gave the false impression that Phoenix partnered with major employers like the American Red Cross, AT&T, Microsoft, Twitter, and Yahoo. This was the largest financial settlement ever reached between the FTC and a for-profit college. The settlement also stipulated that Phoenix is banned permanently from running advertisements that promote a misleading benefit. Phoenix’s most recent advertising campaign clearly defies this injunction.
We applaud ED’s recent efforts to hold for-profit colleges accountable, including developing a low-financial-value programs list and providing borrower defense to repayment discharges for students who attended Corinthian Colleges, ITT Technical Institute, and Westwood. ED, VA, and DOD, however, can and must take additional steps to protect student borrowers and taxpayers by scrutinizing Phoenix’s participation in federal student aid programs, especially after clear violations of its previous agreement with the FTC.
Thank you for your consideration, and we look forward to your response.
