DeVry University's parent company is agreeing to settle allegations in New York that the for-profit school misled students about the job and salary statistics of its graduates.
In announcing a $2.75 million settlement in which DeVry neither admitted nor denied liability, New York Attorney General Eric Schneiderman said in a statement, "DeVry used misleading claims to lure in students who were simply seeking a college degree, greatly exaggerating job and salary prospects for graduates."
DeVry Group said it was "pleased this matter has been resolved, particularly as DeVry University implements recently announced student commitments and as we continue our focus on investments that directly support our students’ success."
Most of the settlement funds will be used to pay restitution to graduates.
DeVry had previously agreed to settle similar allegations brought by the Federal Trade Commission for $100 million.
For-profit giant DeVry University has agreed to settle claims asserted by the U.S. Department of Education relating to the school's marketing of its programs, which the government had alleged was deceptive.
“Students deserve accurate information about where to invest their time and money, and the law is simple and clear: recruitment claims must be backed up by hard data,” Education Secretary John B. King Jr. said in a statement announcing the agreement.
According to a report
in the Washington Post, "The Department of Education is subjecting DeVry University to tougher financial oversight as part of a settlement over the for-profit college chain’s alleged use of misleading information about the employment of its graduates in radio, television, online and print advertisements."
As part of its deal with the government, DeVry can no longer advertise that 90 percent of its graduates secure employment within six months of leaving school and must disclose on its website that this previous claim lacks substantiation.
Another leader in for-profit education is undergoing retrenchment at a time of increased federal regulation and public attention of the industry.
According to published reports in publications including the Consumerist
and the Oregonian
, DeVry University students at 14 campuses in 11 cities -- including the company's Southfield, Michigan campus -- will only have the option of taking classes online by year-end in a company effort to save expense.
The Oregonian stated that "the closures are part of a national trend among for-profit universities, which have been criticized for high tuition costs, low retention rates and heavy federal support."
In an obtuse April 23 news release to the investment community, DeVry did not detail the closures, but alluded to changes to improve the company's bottom line: "Near-term, the university is taking action to differentially invest in its strongest markets and programs; reduce its cost structure; and establish a distinct voice for its brand," the statement said, "In addition, DeVry University is implementing strategies to place it on a path for growth by enhancing the teaching and learning model, addressing affordability, and strengthening employer workforce solutions. Taken together, these actions are designed to maintain positive economics in fiscal 2016."
In addition to the Michigan campus in Southfield, DeVry is reportedly closing two campuses in Houston, one in Indianapolis, one in Memphis, one in Milwaukee, one in Minneapolis, one in Pittsburgh, one in Portland, two in Seattle, one in St. Louis, and two in Tampa.These closures may make it more difficult for hundreds of students to complete the programs that they intended to pursue at the time of their enrollment.
If you are a student or faculty with concerns about how the DeVry closings may impact people whose education and jobs depend on the DeVry campuses scheduled to close, you can share those concerns with attorneys at College Watchdogs here.
A U.S. Senator is taking steps to advise high school students regarding the risks of pursuing post-secondary education at for-profit schools. In a press release, U.S. Senator Dick Durbin (D-IL) announced that he had urged high school principals across Illinois to ensure that their students are receiving honest and accurate information about their higher education options, and that they are aware of the risks associated with the for-profit college industry. Durbin stated that he wrote the principals to call their attention to the “often irresistible lure of for-profit colleges,” many of which are facing increased scrutiny from federal and state regulators for a variety of abuses including fraudulent marketing and recruiting practices, falsifying job placement rates, and predatory lending practices. Durbin asked the principals to make their students aware of all of their options for accessible, affordable higher education, including programs at community college and other not-for-profit institutions.In the letter to principals, Durbin wrote in part, "Students can hardly ride a CTA bus, watch their favorite prime-time sitcom, or surf the internet without being bombarded by attention-grabbing advertisements from for-profit colleges offering a hassle-free enrollment process, federal financial assistance, flexible schedules and a promised path to high-paying jobs and a better life. But too often it doesn't work out that way."
The Senator's letter drew a stern response from one of the nation's largest for-profit providers of post-secondary education, Devry, Inc., which is based in Durbin's home state of Illinois. Devry stated in its own public statement that it had successfully educated tens of thousands of students in Illinois, including a number who participated in a program that allows high school students to earn associate's degree credits while still enrolled in high school.
A coalition of attorneys general from more than 30 states are engaged in a coordinated effort to investigate and crack down on predatory practices within the for-profit school industry. As reported
by the Pew Charitable Trust's news service, leaders in 32 states, working under the leadership of Kentucky Attorney General Jack Conway, are investigating complaints against for-profit colleges and trade schools. One reason for the effort, according to the report, is the sheer volume of taxpayer dollars going to support the for-profit school industry, which routinely receives as much as 90 percent of its revenue from federal and state student loan programs.
The Pew report chronicles the experience of an Iraq war veteran, Murray Hastie, who was initially turned down by two colleges upon his return from two tours of duty. According to Pew, Hastie then came upon DeVry University, a for-profit school that sent a representative to his home the day after he filled out an online information request. Hastie decided to enroll in a "biomedical informatics" program at a DeVry campus in New Jersey, after being informed that the costs of the program would be covered by GI benefits, according to Pew. But Hastie's experience thereafter was troubling. As described in the Pew report: "Three semesters into the program, Hastie was struggling. He was being taught to write computer code, not preparing to work in a research lab, which is what he had been told he would be doing. Meanwhile, he was increasingly worried about his mounting debt. By the time he decided to cut his losses and move back home, Hastie had racked up more than $90,000 in student loans—with no degree to show for it."