Many for-profit college chains recruited students through ads touting exceedingly high job-placement rates, but as we’ve seen from the recent collapses of chains like Corinthian Colleges Inc. and ITT Tech, those placement statistics can be artificially inflated. This week, for-profit educator DeVry Education Group agreed to be more honest and transparent about the job-placement claims in its ads and recruitment materials.
DeVry had long touted in its marketing that, since 1975, 90% of its graduates seeking employment had found jobs in their respective fields within six months of graduation. However, as part of a new settlement with the Department of Education, the school has agreed to stop making this claim.
The settlement [PDF], which also requires DeVry to increase its five-year letter of credit to no less than $68.4 million and better disclose job-placement rates to prospective students, stems from an Aug. 2015 request by the Dept. of Education that the school provide data and other information to substantiate the 90% claim.
After reviewing the information that DeVry provided, the Federal Student Aid office found that the school could not provide evidence to support the claims.
“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,” U.S. Secretary of Education John B. King Jr. said in a statement.
Under Thursday’s settlement, DeVry must immediately cease marketing claims that include the “Since 1975 Representation,” stop making claims about post-graduation employment rates without proper data, must prominently disclose for two years a notice on its website homepage regarding its failure to substantiate the “Since 1975” claim, and take steps to scrub the claim from all of its websites and those under its control.
Additionally, DeVry will participate in federal student aid programs only through a provisional program participation agreement. If DeVry does not comply with all requirements of the settlement, it could be prohibited from participating in federal student aid programs.
As for the school’s requirement to post a letter of credit of no less than $68.4 million, the Dept. of Education says those funds could be used to pay refunds owed to or on behalf of current or former students if the school closes.
The Dept. of Education cautions that Thursday’s settlement only resolves a “single, unsubstantiated claim and does not prohibit the Department from imposing future enforcement actions against DeVry in the event of additional findings.”
In Jan. 2016, the Federal Trade Commission accused DeVry of misleading consumers about the job-placement rates in graduates’ chosen fields of study, and alleges the school falsely claimed graduates would earn more than those graduating with bachelor’s degrees from other colleges or universities. That case is still pending; on Oct. 3, the judge noted that a recent settlement meeting had not resulted in an agreement. The Dept. of Education says it will continue to work with the FTC on this lawsuit.
The Dept. of Education says in a statement that it will continue to work with the FTC on the lawsuit.
Sen. Dick Durbin, of Illinois, applauded the Dept. of Education’s settlement with the school on Thursday.
“Requiring that DeVry make honest disclosures to students of their actual job placement results and that the school provide a letter of credit to protect taxpayers in the future are prudent steps when we consider our recent experience with other for-profit schools,” Durbin said, referring to the recent closure of the ITT Technical Institute chain. “I commend the Department of Education for making it clear that the days of misleading students and leaving taxpayers holding the bag are coming to an end in the for-profit college world.”
Thursday’s settlement is just the latest issue DeVry has faced. In addition to the FTC’s Jan. 2016 lawsuit, the Department of Veterans Affairs announced in March that it would suspend the school’s status as a Principles of Excellence institution.
The VA’s Principles of Excellence status is bestowed on schools that agree to provide students with a personalized form covering the total cost of an education program, ensure accreditation of all new programs prior to enrolling students, and end fraudulent and aggressive recruiting techniques and misrepresentations.
More recently, in September, the company said it would limit federal financial aid funding to only 85% of its revenue. This figure will include funds from the Department of Veterans Affairs and military tuition assistance. That’s important to mention, because those two funding sources are not currently included in the 90/10 calculation.
by Ashlee Kieler via Consumerist