DeVry U. agrees to $100M FTC settlement
A proposed court order would require DeVry to notify the students who will benefit from the debt relief.
DeVry University and its parent company have agreed to a $100 million settlement of allegations they misled prospective students about job-hiring success rates and income after graduation, a federal regulator said Thursday.
The Federal Trade Commission settlement tentatively resolves a January lawsuit that accused for-profit school DeVry of claiming that 90% of graduates were hired for jobs in their fields within six months of graduating. Ads making the claims appeared on TV, radio, online and in other media, the FTC said.
Filed in California federal court in January, the court complaint also alleged that DeVry misled students by claiming that its graduates with bachelor’s degrees had 15% higher incomes one year after graduation, on average, in comparison with similar graduates from other colleges and universities.
Under the settlement terms, DeVry will pay $49.4 million in cash that will be distributed to qualifying students who were harmed by the deceptive ads, the FTC said. DeVry also will pay $50.6 million in debt relief.
The forgiven debt includes $30.35 million, representing the full balance owed on all private unpaid student loans DeVry issued to undergraduate students between September 2008 and September 2015, the FTC said. An additional $20.25 million in student debts for tuition, books and lab fees is also covered by the forgiveness provision, the regulator said.
The settlement requires federal court approval. A proposed court order would require DeVry to notify the students who will benefit from the debt relief, as well as inform credit bureaus and collection agencies.