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

DeVry operates five campuses in Georgia, including this one in Stockbridge.

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.

 

Reader Comments 0

15 comments
RolleTheorem
RolleTheorem

As a Keller graduate, I am dismayed, because of the amazing legacy Herman DeVry has left in distance education.

My masters degree from Keller is the toughest thing I have ever done. It was never necessary to mislead anyone. The quality of a DeVry education speaks for itself.

Ken Wilson
Ken Wilson

Funny thing. DeVry has been making this claim since the mid 80's. It's 2016 and it's just now catching up to them?

Lee_CPA2
Lee_CPA2

Yep, scams and misinformation abound in the education / industrial complex.  Here are a few:


Scam:  College graduates, on average, earn $xx million more than those without a college education.

Reality:  Some degree programs do, many do not.

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Scam:  College financial advisers signing up students to incur tens of thousands, sometimes hundreds of thousands of student debt, to obtain degrees that have little or no commercial value.

Reality:  Bad way to start your adult life, tens of thousands of dollars in debt and the only job you can find is flipping burgers at $7 / hour.

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Scam:  Teachers obtaining "doctorates" from online diploma mills.

Reality:  Taxpayers take it on the nose for this one - especially for the lower grades.  At least most teachers are honest about it, they admit they do it for the bump in salary.  The worst, those who insist their students call them "Dr."

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Scam:  Most of the "research based" poppycock coming out of colleges and universities.

Reality:  It's "publish or perish" in much of academia.  Unfortunately, every now and then, someone grabs ahold of one of these ideas and tries to implement it.


Maybe schools should start adding disclaimers to all their communications, sorta like the used car salesmen and the makers of Viagra have to do....

Starik
Starik

@Lee_CPA2 They also victimize recent vets who use their VA college money - and all the rest of us.

redweather
redweather

@Lee_CPA2 Too bad your degree, assuming you have one, didn't help you learn how to think clearly. Is that another charge you would like to level at colleges?

OriginalProf
OriginalProf

C'mon, folks, this is a for-profit university. Not really that different from Trump U. These worthless schools take their profits and give them to the shareholders rather than improving the school. They'll do anything to take in students and rake in their profits. Can't get any school to take you because of low high school grades? No problem. Want high grades with little work? No problem. Want a job after graduation?  Now, that's a problem, for the degrees are worthless and employers know it.


The worst thing about schools like DeVry is that they suck in veterans who use their GI Bill benefits,can't get a job afterwards, and can't afford a regular school either. Scumbag schools.

Lee_CPA2
Lee_CPA2

@OriginalProf

"They'll do anything to take in students and rake in their profits. Can't get any school to take you because of low high school grades? No problem. Want high grades with little work? No problem. Want a job after graduation?  Now, that's a problem, for the degrees are worthless and employers know it."


Yes, why go to DeVry and learn about computers when you can go to a public college and major in "African American Studies".  I mean, we were interviewing for an accountant's job the other day and I told the group, "I know this person has her CPA and Master of Accountancy degree, but what about her Swahili language skills?"

Pelosied
Pelosied

What if taxpayers could get reimbursements from public schools that don't teach? What if parents could then take those tax dollars to the school of their choice?

Ychromosome
Ychromosome

@Pelosied The "debt relief" is essentially giving the money to taxpayers, as most of the debt is guaranteed by us and it probably wasn't going to get paid otherwise. 

Starik
Starik

What about the teacher education scams? "Get your Ed.D and you'll get paid better and people will call you Dr." scams.

Bobslee
Bobslee

Is that the "working in a doctor's world" college, or the "learn to fix military jets" college?  They all kind of run together.