ED, DeVry Reach Settlement Over Unsubstantiated Job Placement Claims

By Brittany Hackett, Communications Staff

The Department of Education (ED) and DeVry University on Thursday reached a settlement agreement regarding ED’s charge that the school used unsubstantiated job placement claims for recruitment and in advertising, further increasing ED’s oversight of the for-profit institution.

The charges levied by ED stem from an August 2015 request that DeVry provide data and other information to back up its claim that, since 1975, 90 percent of DeVry graduates were employed in their field of study within six months of completion. Federal Student Aid (FSA) found that the information provided by DeVry did not substantiate that claim.

Under the settlement agreement, DeVry University will immediately begin participating in the federal student aid programs through a provisional program participation agreement, which can last as long as five years. The institution has also been placed on Heightened Cash Monitoring.

DeVry’s continued participation in Title IV programs will also be contingent on its complying with additional requirements, which include:

  • Ceasing the publishing of marketing claims that include the “Since 1975 Representation;”
  • Including, for the next two years, a notice on its online homepage about its failure to substantiate the “Since 1975 Representation,” as well as in new enrollment agreements for a five-year period;
  • Taking steps to rid the “Since 1975 Representation” from the internet, both on its own sites and sites outside of its control;
  • Ceasing making any representations about graduate employment rates that do not include:
    • Graduate-specific data to substantiate the representations, and
    • Documentation of the methodology used to calculate the claims;
  • Post an irrevocable, five-year letter of credit of no less than $68.4 million, which represents about 10 percent of DeVry University’s total Title IV aid revenue for the 2014-15 award year.

“DeVry University is pleased to have resolved the Notice in full cooperation with the Department and continues to cooperate with the Department to resolve the remainder of its August 2015 investigation,” the school said in a statement. “The settlement allows DeVry University to continue communicating its strong student outcomes, while providing assurances regarding the extent of its graduate employment data.”

While Thursday’s settlement resolves the issue of DeVry’s job placement claims, it “does not prohibit the Department from imposing future enforcement actions against DeVry in the event of additional findings,” ED said in a statement.

For instance, the Federal Trade Commission (FTC) is currently suing DeVry on allegations that its advertisements deceived customers about job placement rates and falsely claimed that its bachelor’s degree graduates would earn more than their counterparts from other colleges or universities. ED is “working closely” with FTC on the lawsuit and will continue to conduct its own investigations of the institution.

 

Publication Date: 10/14/2016


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