NORTH BRUNSWICK, NJ–DeVry University, a for-profit school with a location in North Brunswick and dozens of others in the US, has agreed to a $100 million settlement of a federal lawsuit over claims made in its advertising.
The suit alleged that the school misled prospective students with ads promising high employment success upon graduation, the Federal Trade Commission (FTC) announced on December 15.
Under the arrangement, DeVry and its parent company, DeVry Education Group, agreed to pay about $49 million in cash to qualifying students harmed by DeVry’s conduct, and nearly $51 million in debt relief on all private unpaid student loans that it issued between September 2008 and September 2015.
DeVry also agreed to forgive about $20 million in student debts for tuition, books and lab fees.
“When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims,” said FTC Chairwoman Edith Ramirez in a statement.
“The FTC has secured compensation for the many students who were harmed, and I am pleased that DeVry is changing its practices.”
The deal originated from a lawsuit filed early this year, one that alleged Devry was dishonest–claiming that 90% of its graduates actively seeking employment would land jobs in their field within six months of graduation.
“Advertisements making these claims appeared on television and radio, as well as online and in print and other media,” said the FTC in a news release.
The trade commission added that the complaint also professed “DeVry misled students by claiming that graduates with bachelor’s degrees, on average, had 15 percent higher incomes one year after graduation than the graduates with bachelor’s degrees from all other colleges or universities.”
Under the terms of the agreement, DeVry “neither [admitted] nor [denied] any of the allegations in the Complaint, except as specifically stated in [the] Order. Only for purposes of this action, Defendants admit the facts necessary to establish jurisdiction,” reads a 25-page court order.
The school had reportedly rejected the allegations in previous court papers.
DeVry must now "notify the students who will receive debt relief, and to inform the credit bureaus and collection agencies of the debt forgiveness,” said the commission.
“All loan and debt forgiveness will occur automatically. DeVry will also release transcripts and diplomas previously withheld from students because of outstanding debt and will cooperate with future requests for diplomas and transcripts and related enrollment or graduation information.”
The settlement also includes provisions designed to prevent the school from misleading consumers in the future.
“Among other things, it prohibits DeVry from misrepresenting the likelihood that graduates will get a job as a result of their degree," said the FTC.
And it "specifically prohibits DeVry from including jobs students obtained more than six months before graduating whenever DeVry advertises its graduates’ success in finding jobs near graduation," said the commission.
The agreement also prohibits the school from misrepresenting the compensation or salary ranges that students or graduates have received or may conceivably receive in the future.
The school must also comply with a slew of other provisions outlined in the court order.
For instance, during the next 20 years, it must "implement a training program for all principals, officers, directors, managers, employees, agents, and representatives who direct or engage in the promotion or sale of any educational product or service," says the court order.