The U.S. Federal Trade Commission today filed a lawsuit against one of the largest for-profit colleges, DeVry University, for allegedly misleading students about job placement rates and salaries for the school’s graduates. According to the FTC’s enforcement action, they didn’t get the truth: The FTC said DeVry told students that 90% of them would get jobs in their fields within six months after graduation, but this wasn’t true.
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The complaint also charges DeVry with falsely claiming that graduates had 15 percent higher incomes one year after graduation, on average, than graduates of all other colleges.
These weren’t one-time slip-ups on DeVry’s part, either, the FTC noted.
The employment assertion was central to the university’s marketing campaign since at least 2008, according to the complaint. Other for-profit colleges like DeVry have come under fire lately, the most notable being Corinthian Colleges, which left students in the lurch after it abruptly shuttered.
This is the latest action against for-profit colleges, which are facing increasing scrutiny from state and federal regulators amid evidence of aggressive recruiting, high costs and poor student performance.
“DeVry University measures the employment and earnings results of its graduates on a sound, rational and transparent basis, and has published these results in a consistent manner over the years to provide students meaningful information”, it said. As of a year ago, it had about 144,000 students around the world – many of them in Brazil.
In a related action, the Department of Education is requiring DeVry to pull advertisements about post-graduation employment outcomes and notify students of its inability to substantiate the claims, under the threat of losing access to the federal financial aid programs.
DeVry released a statement asserting that the FTC’s complaint “is without valid legal basis” and adding, “DeVry Education Group intends to vigorously contest a complaint filed by the Federal Trade Commission, challenging the employment and earnings outcomes of DeVry University graduates”. The company described several examples, including a graduate who majored in business administration with a specialization in health services management working as a server in a restaurant.
The complaint also alleges that DeVry’s calculations included graduates who were working in jobs they held before enrolling at DeVry, as opposed to those they landed after graduation. DeVry officials said the company will request a hearing on the department’s decision.
“Approximately 30,000 to 50,000 students may have been impacted”, FTC Chairwoman Edith Ramirez told a news conference.
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There is no national standard for measuring employment statistics, DeVry said.
