At the beginning of the year, the Federal Trade Commission sued popular for-profit college DeVry University, claiming the school’s advertising misled would-be students about how likely a DeVry degree is to get them a job. And now to ring out the year, the school and the Commission have reached a $100 million settlement that sends all that money right back into students’ pockets.
The FTC alleged in its original complaint that DeVry misled thousands of students with deceptive advertisements and marketing campaigns. Those ads claimed that 90% of DeVry students found work in their field within six months of graduation, and later added claims that DeVry students earned 15% more, one year after graduating, than students from all other colleges and universities.
If those ads seem outlandish to you, the FTC clearly agrees.
Under the terms of the settlement announced today, DeVry will pay a total of $100 million. Just under half of that — $49.4 million — is marked for direct payments back to qualifying students who were harmed by the ads. The other $50.6 million is for debt relief for students who attended between September, 2008 and September, 2015.
All active, private, unpaid student loans that DeVry issued during that seven-year span will have their full balance forgiven, to the tune of $30.35 million. The remaining balance — just over $20 million — will go to relieving other student debts owed to DeVry for other expenses like tuition, books, and lab fees.
In addition to forgiving all that debt and reimbursing students, DeVry must also inform credit bureaus and collection agencies that the debt has been forgiven and must release any transcripts, diplomas, or other enrollment or graduation information it was withholding due to outstanding debts.
“When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims,” FTC Chair Edith Ramirez said 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.”
This agreement is a separate, but related, action to the settlement DeVry reached with the Department of Education in October. As a result of that DOE agreement, DeVry has had to stop touting that inflated “90%” figure. That earlier settlement also required DeVry “prominently disclose on its website homepage” for at least two years a notice about its failure to substantiate the claims.
The FTC has set up a dedicated site for questions about the settlement here, or you can sign up to receive email updates about the settlement from the Commission.
by Kate Cox via Consumerist