FTC case against DeVry yields $100 million settlement

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Claims about employment prospects and income levels are like any other objective advertising representation – and Job #1 for advertisers is to support those promises with solid evidence. DeVry University and its parent company have entered into a $100 million settlement to resolve the FTC’s allegations that the defendants’ claims didn’t make the grade.

According to the FTC, DeVry violated the law by deceptively claiming that 90% of its grads actively seeking employment landed jobs in their field within six months of graduation. The complaint also challenged as misleading DeVry’s representation that one year after graduation, its bachelor’s degree grads had, on average, incomes that were 15% higher than the incomes of bachelor’s degree grads from all other colleges and universities.

How will the $100 million settlement be distributed? DeVry will pay $49.4 million in cash to qualifying students who were harmed by the deceptive ads. The proposed order includes an additional $50.6 million in debt forgiveness. That figure represents the full balance owed on all unpaid private student loans issued to DeVry undergrads between September 2008 and September 2015 – $30.35 million – plus $20.25 million in student debt for things like tuition, books, and lab fees.

But that’s not all the defendants will be doing for students the FTC alleges were deceived. The order also requires DeVry to:

  • directly notify consumers who will be receiving debt forgiveness;
  • inform credit bureaus and collection agencies of the debt forgiveness;
  • release transcripts and diplomas that DeVry withheld from students because of outstanding debt and cooperate with future requests for diplomas, transcripts, and related enrollment or graduation information; and
  • set up a dedicated telephone hotline where consumers can call with questions about debt forgiveness, their credit reports, or collections concerns.

The settlement also includes provisions that will change how DeVry does business from here on in. Among other things, the order prohibits DeVry from misrepresenting the likelihood that graduates will get a job as a result of their degree. In addition, if the defendants want to make future claims about its graduates’ success in finding jobs near graduation, they can’t include jobs that students landed more than six months before graduating. The settlement also prohibits DeVry from misrepresenting the compensation students or grads have earned or can expect to earn.

What lessons can others can learn from the FTC’s action against DeVry University?

1.   For many consumers, education is the second-largest purchase they’ll ever make. Companies in that sector and within the FTC’s jurisdiction are held to the same truth-in-advertising standards as any other business.

2.   Say “substantiation” and some advertisers erroneously assume the term refers just to things like health claims. Wrong.  If your company makes any objective representation expressly or by implication – including statements about employment or earnings prospects – you need solid proof to back up those promises.

Visit ftc.gov/devry for more information about the DeVry settlement and share consumer tips from the FTC about evaluating educational opportunities.

 

Comments

Does this debt forgiveness for students mean that students will have to pay income taxes on these amounts?

If you had debt and paid it off will they be refunding you your money back?

I am interested in the answer to the question

As a recent IRS victim, trust me, forgiven debt counts as income to them.

Does this include students that attend Keller Graduate School of Management, a part of DeVry, during the times stated?

Hi, Douglas F.  The settlement applies only to DeVry University graduates because those were the ad claims challenged in the FTC complaint as deceptive.

I don't think this answers the question. Keller = DeVry.

IFAIR, I think you are incorrect, Keller is a part of the DeVry education group. Keller is simply the name of Devry's School of Management. (and originally Keller owned DeVry). As a graduate from Keller School of Management, my graduate certificate still has DeVry University on it. Until someone knows for sure, do not pass on unsubstantiated information. http://www.devryeducationgroup.com/our-institutions/devry-university.html

I agree. Keller is the graduate program for Devry. I have tried to apply for jobs related to my HR concentration and do not qualify because my experience level. I have the same accounting position from my experience before I attended Keller. In fact, I got a coffee mug that says Keller Devry. I am almost 60k in debt and been paying mostly interest since 2008. I think we need to re-evaluate the lawsuit and include Keller students.

Just got a notice they forgave the remaining loan I did through them for Keller. But not the portion I already paid. I'm unsure now about the federal loans, though?

Kim glad you were able to obtain compensation, do you mind if I ask what term you attended?

Hi Kim,

Can you provide me info on how that was done for you? I called the FTC customer service and they stated that only DeVry University is included within this lawsuit not Keller. I was hoping you can direct me so I am able to find out thru Keller.

When did you apply for forgiveness? How long did it take for you?

I attended Devry's Keller Business School of Management from 2010 - 2012. In reference to Kim's comment, how can I get a portion of my student loans that I obtained while attended forgiven?

What if you paid the debt off. Will they refund you your money back?

How do we know who is eligible for the debt forgiveness?

Does this go towards students of Keller as well?

Whay about the other previous students who attened DeVry in the 90's (of which I am one)?, it isn't as if they weren't using the exact SAME numbers, etc. to draw us in to enrollment!

I agree. I graduate in 2007, signed up in 2002 and the reason I signed up was because they guaranteed job placement within a short time of graduation. That never happened. I want to be included. The lawsuit should go back further.

I agree I graduated in 2007 and they were doing the same advertising of getting a job. I thought it was because I didn't have enough education to get a job so I then went to Keller in hopes to land a better job because they said I would. I have 20 years management experience a Ba and an MBA and can't get a better job. I don't think it is me anymore I think it is the school I received my degrees from. And now the poor media on this is not going to help even more. It needs to back further and include Keller. Who do I reach out too so this is looked at?

I also went through decry in 2005-2007.
They had the same exact advertising. This is not right at all !

What about the Ross University people (owned by DeVry) and the scams related to that?

FTC thank you so much......you have no idea how many lives your going to change....including mines.....for making this possible.

Thank you

This whole case and settlement was a joke to begin with. 200 dollars per person... Ftc failed hard.

I had $7,430 paid off on a private loan I held with DeVry and Heartland ECSI. While the amount of the settlement may not seem like when compared to the number of students to go through DeVry's door, it is not something to scoff at either.

I don't know where you got your information of $200 power person, but I received a ceditt for what I owed and it was almost $4,000.

Do you know if it applys to the grad students from Keller?

I'm so excited that someone is giving us are just do. Because I had attended DeFraud University in middle of 2007-10 and managed to graduate. With an associate degree in NSA program. Unfortunately, I was unable to find a job/or start my career in my field od study becuase of the lack of support from the the career service. In 2016, I am working as a security guard almost five years a bus driver for a year. Tell me is this the american dream that i went to school for. I defaulted on my student loans in which lead me to consolidate my federal loans into one new loan just to get out of default. I had accumulated a lot of debt from this school. and its no way I can repay back $43,000. Working two jobs paying me under 15hr, Devry proclaim to help students find jobs after graduating from school. However, it's a lie how about that they recuirted me with their deceptive ads and false reports by putting out non factual statistics about their students make more money than students from other schools.

I just hope that my situation can be resolved, because for years after graduating from that school its been questionable about their fraudulent business practices. In terms of deceptive advistisment and false-report.

Defraud University LOL - did the same thing to me. They were vultures when it came to my student loans.

The settlement stated private loans during the time period, what about federal loans?

This Settlement resolved nothing. Ftc Failed So Hard. They settled for low, they either didnt have a solid case or was bribed.

This settlement does not specifically cover Federal Loans, as I understand it. There are programs out there for these loans, one being the Borrower Defense to Repayment claim. The information is located on the Department of Education's web site. Also, depending upon your circumstances, judges are becoming a lot more lenient towards students loans being discharged under bankruptcy. This is EXTREMELY difficult however, and you must meed a list of strict requirements.

This is a Great Start! Now Go After Tirbeca Flashpoint in Chicago and Apollo Education Groups many brands; especially Phoenix!!!

The settlement is leaving me out for loan forgiveness in the verbiage, "Loans procured from DeVry" I could not attend unless I obtained a Federal Insured Student Loan. Therefore I need another avenue to have my loans forgiven. Any help is appreciated.

Does this also apply to the Master's programs as well?

I sure hope it does because I sent an email directly to the FTC to join this lawsuit in 2015. I was unemployed after graduating in 2014 for almost 2 years. I finally obtained a job in my studies because of my vet status. Companies don't take this school seriouslly at all in my experience. My education did mostly prepare me for my job but the student loan debt is outrageously high for any entry level salary even with a grad degree!!!

Why does the lawsuit start in 2008? What about everyone prior to that who never got anything at all? I graduated in 2007 and not once did my counselor reach out to me. I paid over $40K and struggled to pay it back and I have nothing to show for my education.

I have submitted a complaint to the Office of the WA State Attorney Generals office, Higher education, and Devery itself in 4/2011 on DeVry University’s Deceptive educational/financial services.

In my search of evidence to this predatory tactics of the school, amongst several other bad things, I found that it was using unemployment agencies to get to people that are in desperation. It was still is using its deceptive advertisement to this population group (the unemployed) so as to access US Federal educational fund, which makes it not only a bad financial practice but also a major a contributing factor for current and future US budget deficit. It is a fraud, waste and abuse of federal fund and the practices did not follow the Program Integrity Rules and Promises that are expected from educational institutions throughout the US.
Guess what, no one gave a damn about it. Instead, my tax return was garnished, separated from my family and could not hold on to a single job.
Yet again , this is a proof that individuals like you and me have no power in taking big corporations such as Devry University. Settlement is reached when agencies such as FCC got involved. What now? Who is going to care about my past anguish and dilemma? it is sad!!!

I called FTC if I can be qualified for a refund and the outside hired agency who picked up the phone said that I am not qualified. Reason: I attended Keller graduate school of management and not DeVry University. What??? FAFSA has DeVry University for school- (and school code used was G20754 which is the federal school code for Devry University and how an earth Department of Education has Keller University?

Regardless, I filed a lawsuit at the US Eastern District court of Michigan, case Number: 17-CV-10256. where at this Point, Devry University has hired 3+ outside Lawyers to block me of obtaining Justice...and a motion to dismiss hearing is to the nearest date. As for me, I can not afford to retain a lawyer so I am a Pro Se to keep fighting.

Check these names out, "DeVry University &/or (Keller Graduate School Of Management)" has a confusing and fraudulent names such as "DeVry University, Keller Graduate School Of Management of DeVry University, DeVry University Keller Graduate School Of Management, Keller Graduate School Of Management, &/or DeVry University College of Keller Graduate School Of Management etc.

As a result, I am denied of relief by FTC.

I hope FTC can see this matter closely.

IRS intercepted my tax return including the Earned Income Tax Credit (EITC) which was fully refundable to me and my wife. Now it is dragging all my children, my wife and myself to poverty without any court order. The Department of Treasury has control of my state tax refund without sending me the disclosure of writ of garnishment from court or pursuant to court orders. Future wages, bonus, and other earnings are under treat of garnishment. Creditor did not take me to court intentionally because they know that the burden of proof is upon itself and would definitely lose at its own expense.

As a result my

o financial success halted,
o retirement goals cut short,
o ability to save for my kids college brought to an end,
o business plan/entrepreneurship held up,
o no investments made,
o furthering my career hampered,
o career paths not taken,
o first home not purchased,
o future dreams given up,
o freedom to be free and happy suppressed,
o parenthood and marriage fractured,
o longing to donate corroded,
o pride, healthy life and moral are all long forgotten.

No student can even file bankruptcy to start over but when it comes to Bankruptcy, DeVry can. How fair is this?

What will the range of the refunds be, from the lowest you will get to the highest you get.

I have two small loans with UAS and one big loan through ESCI both DeVry University lenders. All three of my loans payments are due on 12-30-2016. Do we just not pay the loans or pay the loans until we get an email confirmation that were are eligible for debt forgiveness? I graduated in 2013. I feel like our degrees will no longer be taken seriously by future employers.

Pay the loans until you are officially notified that you are eligible for debt forgiveness. If don't make your payments your loans will eventually default that will mess up your credit history.

What about those with FedLoans? Do we qualify?

I have an unreasonable loan balance consisting solely of federal loans. While I did make use of my textbooks and largely am satisfied with my education, I do have a fiduciary responsibility to myself to see if I qualify for the refund or forgiveness. The FTC website language is vague in that I "may" qualify if I attended during certain dates. My entire education was earned through those dates, but I'm unsure what qualifiers "may" is sorting out.

Thanks,
Greg

I really recommend looking into the Borrower Defense to Repayment Claim on the DOE's website. It's specifically for Federal Loans. The process is long and tiring, the resolution process is 18-24 months but it's worth it.

I just filled out the form. I can only hope that the Borrowers Defense Repayment Claim does something. I am swimming in Federal Student Loan debt because of DeVry.

This is my situation exactly.

How will a student know if they are included on the list of the class's action suit'.

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