DeVry University agrees to $100M FTC settlement
DeVry University and its parent company have agreed to a $100 million settlement of allegations they misled prospective students about job-hiring success rates and income after graduation, a federal regulator said Thursday.
The Federal Trade Commission settlement tentatively resolves a January lawsuit that accused for-profit school DeVry of claiming that 90% of graduates were hired for jobs in their respective fields within six months of graduating. Ads making the claims appeared on TV, radio, online and in other media, the FTC said.
Filed in California federal court in January, the court complaint also alleged that DeVry misled students by claiming that its graduates with bachelor's degrees had 15% higher incomes one year after graduation, on average, in comparison with similar graduates from other colleges and universities.
Under the settlement terms, DeVry will pay $49.4 million in cash that will be distributed to qualifying students who were harmed by the deceptive ads, the FTC said. DeVry also will pay $50.6 million in debt relief.
The forgiven debt includes $30.35 million, representing the full balance owed on all private unpaid student loans DeVry issued to undergraduate students between Sept. 2008 and Sept. 2015, the FTC said. An additional $20.25 million in student debts for tuition, books and lab fees is also covered by the forgiveness provision, the regulator said.
The settlement requires federal court approval. A proposed court order would require DeVry to notify the students who will benefit from the debt relief, as well as inform credit bureaus and collection agencies.
The school is also required to take steps aimed at preventing any repeat of the misleading claims. The settlement bars DeVry from misrepresenting the likelihood that its graduates would get a job as a result of their degrees. The school is specifically prohibited from including data on jobs graduates landed more than six months after graduation in ads that tout students' success in getting hired soon after they earn their degrees, the FTC said.
"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 a statement issued with the settlement announcement."
Based in Downers Grove, Illinois, the university is a subsidiary of DeVry Education Group (DV), which bills itself as one of the largest publicly held, international, higher educational organizations in North America.
"DeVry Group chose to settle this action after filing an answer denying all allegations of wrongdoing," the company said in a formal statement. "Student services and access to federal student loans are not impacted by the settlement, and at no time has the academic quality of a DeVry University education been questioned."
Shares of DeVry Education Group were 2% higher at $31.48 in afternoon trading after the settlement announcement.
Follow Paste BN reporter Kevin McCoy on Twitter: @kmccoynyc