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$100M Fraud Settlement between the FTC and DeVry University
Universities attract potential students by showing how effective the education they provide can be in the labor market. Employment prospects are really important for anyone looking for a degree. DeVry University thus has decided to exaggerate numbers and statistics in order to increase its number of enrollments. Now, the university and its parent company have entered into a $100M fraud settlement in order to resolve the Federal Trade Commission’s (FTC) allegations.
The FTC lawsuit was alleging that DeVry University had misled potential students with advertisements that contained false statistics. According to those ads, the university graduates would reach high employment success rates and income levels upon graduation. More concretely, DeVry had falsely claimed that 90% of its graduates actively looking for a job found jobs in their field within 6 months upon graduation. Also, the university had claimed that its bachelor’s degree graduates received 15% higher incomes a year upon graduation than bachelor degree graduates from all other universities. These advertisements appeared on TV and radio, as well as online and in print.
The illegal practice of using fake numbers to advertise DeVry’s education has harmed tens of thousands of students. According to the FTC Chairwoman Edith Ramirez, no one should mislead people when they are making important decisions regarding their education and future. She also added that the FTC has secured compensation for the students affected by DeVry’s illegal practices.
Under the fraud settlement, DeVry will pay $49.4M in cash to the students who were harmed by the false ads. Also, $50.6M will be provided to forgive student debts. $30.35M of it will go for all private unpaid student loans that the university issued between 2008 and 2015. And $20.25M will cover student debts for tuition, books, and other related fees.
In addition, DeVry will have to do the following:
- Directly notify the students who will receive debt relief
- Inform credit bureaus and collection agencies about the debt relief
- Release diplomas and transcripts withhold from students due to outstanding debt
- Cooperate with future requests for diplomas and transcripts and similar issues
- Set up a telephone hotline to address prospective issues regarding the aforementioned processes
The fraud settlement also contains provisions that will help secure potential students from DeVry’s misleading ads. For example, DeVry should not misrepresent the likelihood of getting a job for its graduates. More specifically, DeVry does not have the right to advertise its graduates’ success in finding jobs if the graduates have obtained their jobs more than 6 months before graduating the university.
If you think you are a victim of DeVry false advertisement practices, you should contact the FTC at 844-578-2645.