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DeVry University and DeVry Education Group recently decided to settle a lawsuit that was brought against them by the Federal Trade Commission over the school’s use of employment statistics in its marketing to prospective students.
The Federal Trade Commission brought the suit against DeVry University in January of this year for ads that allegedly deceived its students. Specifically, DeVry University had been using a statistic since 2008 that said that 90 percent of graduates since 1975 found jobs in their fields of study within six months of graduating.
Lawsuit Against DeVry University Explained
Claiming this was “deceptive,” the FTC said DeVry was unable to substantiate this statistic. It also accused the school of using one graduate who majored in business and later found work as a server in a restaurant as an example of someone who found work in their field. According to the FTC, DeVry also counted graduates who were working in jobs they had already held before attending DeVry University.
In a separate case brought by the federal government, DeVry had been accused of using another allegedly false statistic that its graduates had incomes that were 15 percent higher than their peers at other colleges and universities one year after graduating.
While DeVry maintained its innocence throughout the suit, denying all allegations against them, it decided to settle the matter with the Federal Trade Commission. As part of the settlement, DeVry university has agreed to pay $49.4 million, which will be distributed at the FTC’s discretion; forgive $30.4 million of loans that were issued before September 30, 2015; and forgive $20.2 million of accounts receivable balances for former students.
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DeVry University has also agreed to implement several new training and compliance measures going forward, including maintaining specific substantiation of any statistics or figures it uses in future advertising, specifically about graduate and employment outcomes.
In a statement, FTC Chairwoman Edith Ramirez said, “When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims.” Ramirez continued, “The FTC has secured compensation for the many students who were harmed, and I am pleased that DeVry is changing its practices.”
Concerns With For-Profit Universities
In recent years, local and federal governments have raised concerns about for-profit universities, specifically about the quality of the education they provide and the marketing tactics they use to entice students. Opponents of for-profit colleges and universities claim that students often take on large amounts of debt to attend these schools, which usually market themselves as career-oriented programs that will fast-track their students’ professional lives. Opponents say the career placement claims are often exaggerated and mislead students into taking on expensive educational programs with questionable quality that won’t necessarily pay off in the long term.
Many state governments have been increasing their ability to monitor and regulate these institutions, in an effort to protect potential students from deceptive practices.
In fact, DeVry University was just one in a string of crackdowns against for-profit colleges in recent years. Just last week, Globe University and the Minnesota School of Business were removed from federal loan programs due to allegedly deceptive practices. Corinthian Colleges was fined and forced to close after lawsuits were brought by both the federal and state governments in 2015. The University of Phoenix has also faced government scrutiny in recent years over allegedly deceptive marketing practices.
In a written statement announcing the settlement, DeVry university said it was “pleased this matter is reaching resolution, particularly as its institutions implement recently announced Student Commitments and as we continue our focus on investments that directly support our students’ success”.
Author: Jeff Gitlen