The FTC Investigates DeVry University
FTC sues for-profit DeVry University for job, earning claims
The Federal Trade Commission is suing DeVry, alleging that it misled consumers about students' job and earnings prospects.
Illinois-based DeVry has more than 55 campuses across the country, including classrooms in Oakland, Fremont and San Jose, and offers online or on-campus degree programs in business, technology and health care technology.
In its complaint, the commission alleged that DeVry deceived students in its advertising and marketing by claiming that 90 percent of its graduates actively seeking employment landed jobs in their fields within six months of graduation. The agency also says DeVry was misleading when it claimed its graduates had 15 percent higher incomes one year after graduation on average than graduates of all other colleges or universities.
Both representations, the commission said, were false and unsubstantiated.
DeVry said the allegations are “without a valid legal basis” and that it will “vigorously contest” the complaint.
“There is no national standard for calculating employment statistics among higher education institutions, and the measures and standards used by DeVry University to support its statistics are appropriate,” a statement from the company said.
The commission is seeking a court order to stop DeVry from making the advertising claims, via TV, radio, social media and elsewhere. Ramirez said she hopes to seek monetary relief for students.
In concert with the FTC lawsuit, the Education Department announced its own action against DeVry.
Under Secretary Ted Mitchell said the department has informed DeVry that it must stop making certain claims about its postgraduation outcomes and that it must inform students that it cannot substantiate those claims — or risk losing federal student loan money.
For-profits colleges have come under increasing scrutiny since the collapse of Corinthian Colleges, once one of the largest chains of for-profits.
Corinthian filed for bankruptcy protection in May 2015 amid fraud allegations. The Education Department has been sorting through thousands of claims from Corinthian students seeking relief from their federal student loans — a bailout that could potentially cost up to $3.2 billion.
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