DeVry agrees to $100M settlement in case alleging deception

DeVry will pay $49 million to students harmed by the ads

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BOSTON (AP) — DeVry University and its parent company are paying $100 million to settle a federal lawsuit alleging the school misled students through deceptive ads.

One of the nation’s largest for-profit college chains, DeVry was sued in January by the Federal Trade Commission over advertising claims it was making about the success of its graduates.

In a statement issued Thursday as the settlement was announced, officials for Devry, which is based in Downers Grove, Illinois, denied all wrongdoing but said they are “pleased this matter is reaching resolution.”

The lawsuit focused on two marquee ad claims that DeVry used for years but dropped in October in a settlement with the U.S. Education Department.

Since at least 2008, the chain had advertised that 90 percent of its graduates who actively sought employment landed jobs in their field within six months of graduation.

But federal investigators found that DeVry was counting students who found jobs outside the fields they studied, and who already had jobs before they enrolled.

Included in the statistic was a graduate who studied in the health care field but found work as a restaurant server and another who worked as a car salesman, according to the FTC lawsuit.

The commission also challenged a claim that DeVry graduates earn 15 percent more than alumni at other schools a year after graduation.

Under the settlement, DeVry agreed to pay more than $49 million to the FTC, which says it will distribute the money to students “harmed by DeVry’s conduct.”

Amid scrutiny, for-profit colleges see enrollment slide

The chain also agreed to forgive more than $30 million in loans issued before September 2015, and $20 million in debt owed by former students.

Going forward, DeVry has promised not to misrepresent job and income prospects of potential students, and not to count jobs that students found more than six months before graduation.

FTC Chairwoman Edith Ramirez said in a statement that she’s glad to see DeVry changing its practices.

“When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims,” she said.

DeVry’s statement said the settlement won’t affect its access to federal student loans and that “at no time has the academic quality of a DeVry University education been questioned.”

Like many for-profit colleges, DeVry has struggled in recent years amid heightened government scrutiny. The chain has closed 39 campuses since 2014, leaving 60 as of September.

Some schools blame their woes on the Obama administration, which has sought to hold the industry accountable and crack down on schools accused of misconduct.

The industry’s troubles worsened Monday when Education Secretary John B. King Jr. upheld a decision to cut ties with the nation’s largest accreditor of for-profit colleges, a decision that could force some schools to close.

But some for-profit colleges see President-elect Donald Trump as a champion of the private sector who could spur a rebound for the industry. In the weeks after Trump’s election, shares in DeVry’s parent company surged 30 percent.

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Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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