DeVry Latest For-Profit College Group to Settle Complaints
Posted By Arthur Murray on December 16, 2016 at 3:43 pm
DeVry University and its parent, Illinois-based DeVry Education Group, have agreed to a $100 million settlement in a Federal Trade Commission lawsuit that alleged the for-profit college misled prospective students with advertisements touting high employment rates and compensation for graduates.
Under terms of the settlement, nearly half the money – $49.4 million – will be paid to students who were harmed by the deceptive ads, according to an FTC press release announcing the settlement. A portion will go toward debt relief, including satisfying the full balance owed – $30.35 million – on all private unpaid student loans DeVry issued to students between September 2008 and September 2015. The rest – $20.25 million – will repay student debts for items such as tuition, books, and lab fees.
The FTC had alleged that DeVry misled potential students by claiming in TV, radio and other ads that 90 percent of graduates who actively sought jobs landed employment in their fields within six months. The agency also said DeVry falsely advertised that its graduates with bachelor’s degrees on average earned incomes 15 percent larger than bachelor’s degree holders from all other schools.
“When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims,” FTC Chairwoman Edith Ramirez said in the release. “The FTC has secured compensation for the many students who were harmed, and I am pleased that DeVry is changing its practices.”
DeVry has about 70,000 students and 55 campuses across the U.S.
Other for-profit school troubles
Other for-profits that have run afoul of federal and state governments in recent years include:
Education Management Corp., which owns the Art Institutes, Argosy University, Brown Mackie College and South University and agreed to forgive nearly $103 million in student loans and pay $95.5 million to settle four whistleblower lawsuits.
Corinthian Colleges, which closed most of its campuses in April 2015 due to fraudulent advertising and other complaints.
ITT Technical Institute, which closed in September under scrutiny from the federal government.
Last month, President-elect Donald Trump agreed to a $25 million settlement to end fraud causes against Trump University, his defunct real estate seminar program.