Education Law

DeVry agrees to $100M settlement in FTC suit alleging misleading ads touted graduate success

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Student loan money.

DeVry University has agreed to pay $100 million to settle claims by the Federal Trade Commission that its ads misled prospective students about its graduates’ job success.

DeVry did not admit or deny the allegations, report the New York Times, CNN Money and Bloomberg’s Technology, Telecom and Internet Blog. The FTC announced the settlement here and here, and posted its complaint (PDF) and proposed federal court order (PDF).

The settlement requires DeVry to pay $49.4 million to students harmed by the deceptive ads, to forgive $30.35 million in unpaid student loans the school issued to students between September 2008 and September 2015, and to forgive $20.25 million in student debts from accounts receivable for items such as tuition, books and lab fees. A federal court still must approve the deal.

According to the FTC complaint, DeVry represented that 90 percent of its graduates who were actively seeking employment landed jobs in their field of study within six months of graduation. The university also claimed that its grads obtain jobs that pay significantly more than graduates with bachelor’s degrees from other universities. The FTC says the claims cannot be substantiated.

According to the FTC, DeVry wrongly includes graduates in its statistical count who continued with the same job they had when they enrolled at the university, as well as graduates who didn’t obtain jobs in their field of study. Among those included in the statistics, according to the FTC complaint, were a mail carrier who had a degree in technical management and a server at the Cheesecake Factory who had a degree in business administration. And some students excluded from the calculation were actively seeking employment, according to the FTC.

The FTC also alleged that DeVry based its higher-pay claim on third-party data, rather than its own statistics, even though it had good cause to question the reliability of the third-party information.

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