The Federal Trade Commission and the Department of Education have alleged that DeVry University illegally deceived students by lying about graduates’ employment prospects.
The FTC filed a lawsuit at a US District Court in California on Wednesday against the for-profit college, while the Department of Education informed the institution that its applicants might no longer be eligible for federal financial assistance under Title IV of the Higher Education Act—a lucrative subsidy to corporate higher educators.
FTC Chair Edith Ramirez told reporters in a conference call that it was too early to tell what kind of relief any wronged students might get, but said that between 30,000 and 50,000 were impacted by DeVry’s alleged misrepresentations.
Education Under Secretary Ted Mitchell also noted that immediate goal of the action is to stop the alleged deceptions, and to inform students that they may have been tricked.
According to the FTC’s complaint, DeVry has been peddling falsehoods since 2008, when it started claiming that 90 percent of its graduates landed jobs in their field six months after graduating.
The FTC also said that DeVry had been lying in its advertising since 2013 by boasting that graduates “had 15 percent higher incomes one year after graduation on average than the graduates of all other colleges or universities.”
According to the complaint, DeVry had been fudging its numbers, in part, by taking liberties when describing, for marketing purposes, graduates employed “in their field.” That cohort, per the FTC claims, included health service graduates working as a restaurant server and a car salesman, technical management majors with unpaid volunteer positions, and two graduates with degrees focused on human resources working as couriers.
“The complaint also alleges DeVry’s calculations included graduates who were working in jobs they held prior to enrolling at DeVry, as opposed to those they landed after graduating,” the FTC noted.
In 2014, The Nation reported that DeVry received more than 80 percent of its revenue from federal taxpayers. MarketWatch noted that shares in DeVry Education Group plunged by 17 percent after news of the FTC lawsuit broke.
In December, the Education Department came under heavy criticism from three Democratic senators after it settled with another for-profit college operator accused of defrauding students—the Education Management Corporation (EDMC).
Sens. Elizabeth Warren (D-Mass.), Dick Durbin (D-Ill.) and Richard Blumenthal (D-Conn.) said that the administration “recovered a miniscule fraction of stolen taxpayer funds, held no individuals accountable while failing to even obtain an admission of wrongdoing from EDMC, and now may not even provide relief to thousands of students who owe billions of dollars in student loans because they were illegally recruited.” They additionally bemoaned the fact that applicants to the companies’ schools would still be eligible for federal aid after the deal.
