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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.

 
 
Two for-profit colleges in Massachusetts -- Kaplan Career Institute and Lincoln Technical Institute -- are agreeing to pay former students a total of $2.3 million to settle charges of unfair practice levied against them by the state attorney general.

According to a report in Digital Journal, "The two schools will end up paying out millions of dollars to students, and this will resolve claims of using unfair recruiting tactics. The schools also allegedly inflated job placement numbers in order to tempt students into enrolling at their schools."

The settlement with Kaplan resolves claims relating to its medical vocational program, while Lincoln's resolution relates to allegations pertaining to its criminal justice program.

For more than two years, Massachusetts's attorney general has aggressively investigated claims that for-profit schools oversell and under deliver in the promises they make to working adults relating to job placement and other aspects of their programs.  Unfortunately, other states, including Michigan, have very lax regulation by their top law enforcement officers with little or no meaningful oversight of for-profit schools.

 
 
The Obama Administration's ongoing efforts to regulate the for-profit college industry have yielded a $30 million fine against Corinthian Colleges and threaten to result in similar penalties against other schools.

On April 14, the U.S. Department of Education informed Corinthian that it intended to fine the for-profit education company's  Heald College subsidiary $29.66 million for misrepresenting its placement rates to current and prospective students and to its accreditors, and for failing to complete with federal regulations requiring the complete and accurate disclosure of its placement rates.  Heald is a 13-campus subsidiary with schools primarily in California and other western states.

The government claimed that it had identified more than 900 separate instances of The government's sanctions also prohibit Heald from enrolling new students.

"This should be a wake-up call for consumers across the country about the abuses that can exist within the for-profit college sector," Education Secretary Arne Duncan said in a statement. "We will continue to hold the career college industry accountable and demand reform for the good of students and taxpayers."

As noted by Inside Higher Ed, the regulation used to punish Corinthian and Heald is a a job-placement requirement adopted in 2010 that "has emerged as a possible tool to crack down on for-profits."  The regulation requires colleges to disclose job-placement rates of graduates in programs that fall under "gainful employment."

With respect to Heald's violations of the accurate job-placement reporting requirements, the Education Department's findings were devastating.

The Huffington Post reported that the government had found that  Heald’s "inaccurate job placement rates constituted a 'substantial misrepresentation,' a finding that allows the department to prohibit the school from accessing federal student aid such as Pell grants and loans that students would use to pay for tuition."

"For example, Heald allegedly misled prospective students by advertising false job placement rates that omitted the fact that many of its graduates simply weren’t counted. It also told prospective students that it confirmed graduates’ employment with the graduate or her employer. In reality, the Education Department said, the school in many cases simply relied on its own career services staff for confirmation."

"Heald also paid staffing agencies to hire its graduates, the Education Department said, and counted them as officially employed in their field. In one case, the department found a Heald graduate who only was employed for two days moving computers and organizing cables."
 
 
A substantial jury verdict against a for-profit school in Minnesota has been upheld by a judge.  As reported in the Huffington Post, a Minnesota judge not only refused to set aside a jury verdict of $395,000 against Globe University, but also awarded $500,000 in attorney's fees to be paid by the school.  

The lawsuit was filed against the for-profit school by a former dean, Heidi Weber, who claimed she had been fired for complaining to the school about use of false job placement statistics and other misconduct.

The Huffington Post reported:
"Weber's suit claimed that Globe had violated a state whistleblower law when it fired her from her job as dean of the school's medical assistant program. The Washington County, MN, jury concluded that Weber was indeed fired in 2011 for raising with management that Globe was providing false information to students about placement rates, starting salaries, and the school's accreditation; failing to provide adequate training for students; and improperly paying commissions to school recruiters. The jury awarded Weber $205,000 for lost wages and $190,000 for emotional distress.
"Globe runs 11 campuses in Minnesota, Wisconsin, and South Dakota and has more than 10,000 students. From 2011 to 2012, the company obtained more than $170 million from federal student aid. More than half of Globe's students drop out without graduating; on some campuses, three-quarters drop out."


Questionable representations about job placement are a recurring problem at for-profit colleges and trade schools.  If you are an employee or student at a for-profit school with concerns about representations made to students at the school that you wish to discuss with one of the attorneys operating this College Watchdogs site, call us at 877-540-8333, or complete this form.