The University of Phoenix is expecting to pay up to $80 million to settle a lawsuit over its admissions practices, the school's owner has announced.

The for-profit online school—owned by the Apollo Group—is being sued by two former admissions counselors charging it with obtaining federal student-aid funds under false pretenses.

The Apollo Group announced in October 2009 that it is expecting to settle the suit soon. The lawsuit was first filed in 2003 under the Federal False Claims Act. It alleged that the university wrongfully obtained at least $3 billion in federal funds. The complainants—former employees Mary Hendow and Julie Albertson—hoped at that time to recover $1.5 billion for themselves and for the federal government, according to the Chronicle of Higher Education.

In response to a separate investigation in 2004, the Apollo Group paid about $10 million in fines to the U.S. Dept. of Education, which had been examining it for being overly focused on boosting enrollment. (The University of Phoenix did not admit wrongdoing and the Dept. of Education did not address the school's educational quality.)

University of Phoenix is North America's largest school, with 443,000 students. Apollo Group reports enrollment is up 22 percent this year, and claimed annual revenue of $4 billion for the fiscal year ending on Aug. 31.

The school is regionally accredited, which is the highest form of accreditation. Nonetheless, Phoenix has often sparked controversy in its rise to prominence, with some questioning its ubiquitious ads and its academic credibility.

In GetEducated.com's Ratings & Rankings section, the University of Phoenix has drawn mixed reviews. Students, faculty, and general public members have given the distance learning school and its degree programs grades ranging from A's to F's. A couple of recent comments illustrate the controversy:

"I've attended both a traditional four year college and UoP. It's disturbing to say the least that UoP doesn't have the reputation it deserves. They're definitley [sic] not a degree mill like some might think." —Mark, Oct. 14, 2009, awarding an A-

"I have not been impressed by UoP. The tuition is stupidly expensive and I have quite frankly not gotten much bang for my buck" —Amber, verified student, Sept. 15, 2009, grade: C-

GetEducated uses verified student comments in our Student Satisfaction ranking and public comments in our Public Perception ranking. We plan to release rankings comparing schools on the basis of satisfaction and perception once we receive enough public data. For this, we need your help.

If you have a grade or comment to make about the University of Phoenix—or any other online school or online degree program—please post it by visiting our home page, searching for a school or degree program in our database, and then clicking on Grade This Degree or Grade This School.


© 2009, GetEducated.com, LLC