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FTC: DeVry agrees to $100 million settlement over deceptive claims


In January, the federal government sued operators of DeVry University, alleging they misled consumers about the job and earnings potential of their graduates. Today, the Federal Trade Commission announced a $100 million settlement with DeVry Education Group, parent of DeVry University.

Under the settlement, DeVry will pay $49.4 million in cash to be distributed to qualifying students who were harmed by the deceptive ads, as well as $50.6 million in debt relief. The debt being forgiven includes the full balance owed—$30.35 million—on all private unpaid student loans that DeVry issued to undergraduates between September 2008 and September 2015, and $20.25 million in student debts for items such as tuition, books and lab fees, according to the FTC.

The FTC said DeVry falsely contended 90 percent of its graduates in search of jobs found work in their majors within six months of graduation. It also disputed DeVry's claims on the incomes earned by its students a year after graduation.

Based in Illinois, DeVry has more than 55 campuses across the country including five in the metro area in Alpharetta, Atlanta, Decatur, Duluth and Stockbridge. The university offers online or on-campus degree programs in business, technology and health care technology.

Here is the FTC statement:

DeVry University and its parent company have agreed to a $100 million settlement of a Federal Trade Commission lawsuit alleging that they misled prospective students with ads that touted high employment success rates and income levels upon graduation. The FTC settlement secures significant financial redress for tens of thousands of students harmed by DeVry’s conduct.

“When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims,” said FTC Chairwoman Edith Ramirez. “The FTC has secured compensation for the many students who were harmed, and I am pleased that DeVry is changing its practices.”

The FTC’s complaint charged that DeVry misled consumers in violation of the FTC Act by claiming that 90 percent of graduates actively seeking employment landed jobs in their field within six months of graduation. Advertisements making these claims appeared on television and radio, as well as online and in print and other media.

The complaint further alleges that DeVry misled students by claiming that graduates with bachelor’s degrees, on average, had 15 percent higher incomes one year after graduation than the graduates with bachelor’s degrees from all other colleges or universities.

The proposed federal court order requires DeVry to notify the students who will receive debt relief, and to inform the credit bureaus and collection agencies of the debt forgiveness. All loan and debt forgiveness will occur automatically. DeVry will also release transcripts and diplomas previously withheld from students because of outstanding debt and will cooperate with future requests for diplomas and transcripts and related enrollment or graduation information.

The settlement also includes provisions designed to prevent DeVry from misleading consumers in the future. Among other things, it prohibits DeVry from misrepresenting the likelihood that graduates will get a job as a result of their degree. It specifically prohibits DeVry from including jobs students obtained more than six months before graduating whenever DeVry advertises its graduates’ success in finding jobs near graduation. The settlement also prohibits DeVry from misrepresenting the compensation or compensation ranges that students or graduates have received or can be expected to receive.

The FTC also has a new consumer blog that describes how the refund process was developed and implemented.

The FTC would like to thank the Department of Education and the Department of Veterans Affairs for their cooperation and collaboration.

For more information about the refund and debt forgiveness program, go here or call 844-578-2645. Sign up to get email updates about the FTC’s DeVry refund program.

The commission vote approving the proposed stipulated order was 3-0. The FTC filed the proposed stipulated order in the U.S. District Court for the Central District of California.

NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.

 


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About the Author

Maureen Downey has written editorials and opinion pieces about local, state and federal education policy since the 1990s.