DeVry University Sued by Federal Trade Commission
Posted By Eliana Osborn on February 2, 2016 at 10:47 am
The Federal Trade Commission recently filed suit against DeVry regarding the school’s advertising of misleading employment statistics. This is the next for-profit school in a long line to be facing legal challenges about misleading students. In this instance, the deception is related to post-graduation employment rates.
Back in 2014, President Obama recognized DeVry as a culprit in pricey for-profit higher education problems. He spoke of massive student loan debt during his State of the Union address, referring to a specific audience member burdened by her loan repayment. Though he didn’t mention DeVry in the address, an administration spokesperson identified her and the source of her debt.
DeVry has long been under scrutiny for repayment rates of former students. The National Center for Education Statistics lists the default rates for DeVry at 23.4% in 2010, 18.5% in 2011, and 12.6% in 2012. The national rate for 2012 was 11.8%. A 2015 Brookings report found that fully half of student loan debt taken out after the 2008 recession went to for-profit universities. DeVry ranked fourth in 2015 for students adding $8 million in federal student loan debt that year.
The Federal Trade Commission is not the only entity taking action on DeVry. The Department of Education posted a Notice of Intent to Limit, sent to DeVry. The document is the first step in following up on the FTC claims. DeVry is being asked by the DOE to stop claiming a 90% job placement rate for students in their fields at the six-month mark after graduation.
In other settlements with for-profit schools, attorneys general and the DOE have required outside documentation of employment statistics after a case like DeVry’s. If schools do not comply with the requested verification, they chance being blocked for receiving federal student aid.
Online forums abound with student complaints about DeVry. They are certainly not the only college to receive such vitriol, but there are a significant number of such websites. The Better Business Bureau categorizes complaints against schools. The most frequent type of concern with DeVry has to do with advertising and sales, not the quality of education or issues with finances.
Enrollment is down at DeVry, just like other for-profit universities. Stock is down for DeVry Educational Group, the parent company of the school. The FTC press release states, “DeVry’s advertisements deceived consumers about the likelihood that students would find jobs in their fields of study, and would earn more than those graduating with bachelor’s degrees from other colleges or universities.” Without such dramatic advertising, DeVry’s ability to attract new students will likely diminish.
The lawsuit also represents an uncertain future for current DeVry students. “DeVry University is a good school for people like myself. I work full time and I am also a single mother. DeVry is able to work around my schedule with the choice of taking online classes, and also evening classes, so I can work in the day and be the best mother I can be.” This Pennsylvania student will graduate in 2016—that is, if DeVry stays open.