Federal Trade Commission Suing DeVry University

012816_DeVryThe Federal Trade Commission filed suit against DeVry University on Wednesday for deceptive advertising practices.

DeVry, a for-profit institution, made false claims in television, print, radio and other media advertising, asserting that 90 percent of its graduates found work in their field of study within six months of graduation, the FTC said. In addition, DeVry advertisements claimed that DeVry graduates earned more than graduates from other institutions.

“When prospective students are weighing whether to attend a particular university they often base their decision on an institutions claims and literature, including its marketing materials to assess whether that school will help them further their career goals,” FTC Chairwoman Edith Ramirez said on Wednesday.

“We found several instances where DeVry graduates were not working in their field of study despite DeVry counseling them as doing so, including from this 2012 graduating class where, for example, a business administration graduate with a human resources specialization was working as a delivery driver,” Ramirez added.

Like many other large for-profits, DeVry is a sprawling institution, managed by a central organization, in this case called the DeVry Educational Group. The school has 55 locations in 18 states, according to its website.

One of its offshoots, DeVry University-Illinois, boasts the fifth largest undergraduate enrollment in the country at more than 42,000 students, according to a US News and World Report short list. In terms of graduate success, DeVry’s cohort loan default rate has improved from a low of 23 percent in 2010 to 13 percent in 2012, according to the NCES’s most recent numbers.

In addition to the FTC’s suit, the Department of Education said on Wednesday that it will take action to require DeVry to notify students that claims about a 90 percent job placement rate are false and to compel the institution to cease making false statements in its own and third-party marketing. ED will also move to ensure that an independent auditor will review DeVry’s future statements about postgraduate outcomes.

“As required by the law, and expected by the public, institutions need to be accurate in their marketing and recruiting to prospective students,” Undersecretary of Education Ted Mitchell told reporters.

Ramirez estimated that anywhere from 30,000 to 50,000 students were impacted by DeVry’s alleged misrepresentations. “What we are seeking through our action is a court order to stop DeVry from making these types of misrepresentations and then also seeking monetary relief for affected students,” Ramirez said. “Now, how that all plays out will of course be determined during the course of litigations.”

It would not be unprecedented for former students of a for-profit institution, found to have engaged in deceptive practices, to receive monetary relief. The federal government announced that it would forgive the student loan debt of former students of the Corinthian Colleges in June 2015. Corinthian was found to have “defrauded” thousands of students, in part by misrepresenting graduates’ job placement numbers.

DeVry Education Group said in a statement on Wednesday that it plans to “vigorously contest” the FTC’s suit and that it will also request a hearing from the Department of Education. “DeVry Group believes that the FTC’s complaint—filed 40 years after DeVry University began publishing accurate graduate employment statistics—is without a valid legal basis. In addition, the FTCs complaint contains anecdotal examples that exaggerate the allegations but do not prove them,” the statement continued.

 

Staff writer Catherine Morris can be reached at cmorris@diverseeducation.com.