FTC sues for-profit DeVry University for job, earning claims

January 27, 2016

WASHINGTON (AP) — Another large for-profit college is under government scrutiny — this time, it’s DeVry University.

The Federal Trade Commission on Wednesday sued DeVry, alleging that it misled consumers about students’ job and earnings prospects.

Illinois-based DeVry has more than 55 campuses across the country and offers online or on-campus degree programs in business, technology and health care technology.

In its complaint, the commission alleged that DeVry deceived students in its advertising and marketing by claiming that 90 percent of its graduates actively seeking employment landed jobs in their fields within six months of graduation. The agency also says DeVry was misleading when it claimed its graduates had 15 percent higher incomes one year after graduation on average than graduates of all other colleges or universities.
Both representations, the commission said, were false and unsubstantiated.

Instead of landing jobs in their field of study, FTC Chairwoman Edith Ramirez said, some graduates found themselves working as delivery drivers or restaurant servers. She said anywhere from 30,000 to 50,000 students may have been affected by the alleged deceptive advertising.

DeVry said the allegations are “without a valid legal basis” and that it will “vigorously contest” the complaint.

“There is no national standard for calculating employment statistics among higher education institutions, and the measures and standards used by DeVry University to support its statistics are appropriate,” a statement from the company said.

The commission is seeking a court order to stop DeVry from making the advertising claims, via TV, radio, social media and elsewhere. Ramirez said she hopes to seek monetary relief for students.

“Many students, including those who studied at DeVry, incur significant financial expense to improve their employment opportunities upon graduation,” said Ramirez. “It’s especially important that educational institutions give prospective students the truth about whether their courses will help them obtain the jobs that they want in their chosen field.”

In concert with the FTC lawsuit, the Education Department announced its own action against DeVry.

Under Secretary Ted Mitchell said the department has informed DeVry that it must stop making certain claims about its postgraduation outcomes and that it must inform students that it cannot substantiate those claims — or risk losing federal student loan money.

DeVry has more than 55 campuses in 18 states, including California, Georgia, Illinois and Texas.

For-profits colleges have come under increasing scrutiny since the collapse of Corinthian Colleges, once one of the largest chains of for-profits.

Corinthian filed for bankruptcy protection in May 2015 amid fraud allegations. The Education Department has been sorting through thousands of claims from Corinthian students seeking relief from their federal student loans — a bailout that could potentially cost up to $3.2 billion.

In another case, the Justice Department announced a $95.5 million settlement last November with Education Management Corp., a Pennsylvania company that enrolls students at for-profit trade schools and colleges in the U.S. and Canada. Education Management had been accused of illegally paying recruiters and exaggerating the career-placement abilities of its schools.




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