FTC Files Suit Against Devry University

Gavel with a scale and an open book.

In the Federal Government's latest move to crack down on what it sees as problems with private universities, the Federal Trade Commission (FTC) today announced that it has filed suit against the operators of DeVry University. In its suit the FTC alleged that 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.

Lawsuit Disputes DeVry's Claims of Graduate's Employment and Higher Salaries

In its complaint against DeVry, the FTC alleges that the claim that 90% of DeVry graduates actively seeking employment landed jobs in their field within six months of graduation was deceptive. The complaint also charges that another key claim made by DeVry, that its graduates had 15% higher incomes one year after graduation on average than the graduates of all other colleges or universities, was also deceptive.

“Millions of Americans look to higher education for training that will lead to meaningful employment and good pay,” said FTC Chairwoman Edith Ramirez. “Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn.” 

The complaint alleges that DeVry counted numerous graduates as working “in their field” when they were not, including these examples from the 2012 graduating class:

  • a graduate who majored in business administration with a specialization in health services management working as a server at a restaurant;
  • multiple graduates with majors in technical management whose employment was listed as unpaid volunteer positions at medical centers;
  • a graduate who majored in technical management with a human resources specialization working as a rural mail carrier and another who worked as a driver delivering rain gutters for a construction company; and
  • a graduate who majored in business administration with a health care management specialization working as a car salesman. 

The complaint also alleges that DeVry used data received from a third-party survey and data received directly from graduates in reporting its claim of "15% higher income one year after graduation". The lawsuit cited publicly available data that showed DeVry graduates did not earn significantly more than graduates from other schools within a year of graduation. 

Department of Education Taking Action Against DeVry

In a related action, the U.S. Department of Education is also taking action against DeVry for its marketing practices.  

The Department of Education is telling DeVry that it will be requiring the institution both to stop certain advertising regarding the post-graduation employment outcomes of its students and to take additional steps to ensure that DeVry can substantiate the truthfulness of its post-graduation employment outcomes including using an independent auditor to verify any representations DeVry makes regarding the post graduation employment outcomes of its students.

Latest in Many Federal Actions Against For-Profit Universities

This is the latest move by the Federal Government against for-profit Universities.

In April of 2015, the Federal Government levied $30 million in fines against Corinthian Colleges of California which eventually led to the closing of all of its 28 campuses.

In May of 2015 the Securities and Exchange Commission announced fraud charges against ITT and two of its top executives.

In October 2015, the Department of Defense temporarily suspended Tuition Assistance payments to the University of Phoenix for 3 months, eventually lifting the suspension after it determined  that either the conditions leading to the suspension were unwarranted or they had been cleared up.

Thousands Using GI Bill At DeVry Not Affected

DeVry University operates 55 locations across 18 states, as of 2014 it had a total enrollment of more than 42,000 students. According the the VA, more than 17,000 veterans are using the GI Bill at DeVry and its subsidiaries.

As of yet, the VA has announced no actions against DeVry or its subsidiaries, and the Department of Defense continues to approve Tuition Assistance benefits for DeVry and its subsidiaries.

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