A Message All Colleges and Universities Should Heed - Accuracy in Advertising Matters

By Jennifer L. Blum, Esq.

Last week the Federal Trade Commission (FTC) announced a settlement with the University of Phoenix in response to FTC charges of deceptive advertising. The FTC decision covered a broad range of advertising and marketing – traditional television and radio, social media advertising, and statements made by enrollment advisors. Regardless of the merits and findings, the decision should serve as a wake-up call to all institutions of higher education and in particular to any institution using multi-media to advertise online education. Recent U.S. Department of Education data shows that enrollments at online for-profit institutions is falling while online enrollments at non-profit institutions grew by over 8 percent year-over-year. Indeed, the data shows that the largest online universities are now non-profit. 

As non-profit university enrollments online have grown, their advertisements seem largely indistinguishable from the for-profits’. Truth in advertising – with the most conservative definition of that concept – matters, as does marketing spend. Both students and regulators are watching. The share of valuable and limited resources spent on marketing by institutions is of growing concern in Congress. Likewise, the FTC settlement is a enforcement warning that all institutions should heed. Students have power too. With robust U.S. Department of Education regulations in place, students may seek to have their loans discharged if they can demonstrate reliance and harm caused by over-reaching and inaccurate advertising or marketing claims. 

If there’s one takeaway, it is that every college and university would be well served to double down to collectively demonstrate best efforts and practices when “pitching” the benefits and value of the education they provide future and current students.