DeVry University Will Refund Students $100 Million for False Advertising

DeVry University has agreed to pay a $100 million settlement for a federal lawsuit alleging that it exaggerated the success of graduates, according to a new report.

The for-profit school, and its parent company DeVry Education Group, will pay $51 million in debt relief and $49 million to students harmed by the ads. The debt relief portion will include around $30 million to cover the balances of the college’s private student loans, with a portion of the remaining money slated to go toward debt from books, tuition and lab fees. The Federal Trade Comission (FTC) estimates that there are tens of thousands who will stand to benefit from the settlement, according to the New York Times.

DeVry was originally sued by the FTC in January due to claims of deceiving ads being used to bait prospective students. DeVry is one of the nation’s largest for-profit schools: it has about 70,000 students, and offers both online and standard classes at its 55 campuses across the country. Even with a 3.5 percent revenue decline last year, it still made $1.8 billion, CNN reported.

The FTC complaint states that DeVry’s ads — which appeared across different media such as print, TV, online and radio — falsely claimed a variety of statistics. It’s a recruitment tactic that for-profit universities are notorious for. ITT Tech, another for-profit school that has since shut down due to the intense scrutiny, was similarly found to be making false claims and inflating statistics, Gizmodo reported.

Some of the ads touted that 90 percent of graduates found jobs in their field within six months of graduating from the school, a claim that the Department of Education found the college couldn’t back up, according to CNN. “Federal investigators found that the school was counting students who landed jobs outside of their field, in addition to some that already had jobs before they enrolled. In one example shown in the lawsuit, a graduate who majored in business administration with specialization in health services management was working as a server at a restaurant, but DeVry counted this as a success story,” according to Gizmodo.

Similarly, other ads claimed that the school’s alumni made 15 percent more money than non-DeVry graduates a year after graduation. In October, the DoE prohibited DeVry from making such claims in their ads, the Chicago Tribune reported.

The Obama administration has been especially hard on for-profit schools, according to Politico. Beside DeVry and ITT Tech, other for-profit institutions — like the University of Phoenix and Corinthian Colleges — have been affected by the federal crackdown.

The FTC is still awaiting additional information about the students affected by the ads. Once they get that information, they will determine who will be compensated. Those eligible will be notified by the agency. You can find out more about the debt relief here, and sign-up for email alerts about the settlement here.