DeVry University To Refund Students $2,800 Each After Settlement with New York AG Schneiderman

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Schneiderman. Photo-Flickr

About 809 students will each get back $2,800 after a $2.5 million settlement with DeVry University, New York State Attorney General Eric T. Schneiderman has announced. The Attorney General’s investigation found that DeVry lured students with ads that exaggerated graduates’ success in finding employment and contained inadequately substantiated claims about graduates’ salary success, Schneiderman said.

The Better Business Bureau, which is administering the restitution process, is expected to begin sending out checks to the students later this month.

“DeVry exploited students who were simply trying to further their education,” Schneiderman said. “We will not allow hardworking New Yorkers to be ripped off by greedy companies – which is why DeVry is now paying millions in restitution to hundreds of students. My office will not back down from policing unscrupulous for-profit colleges in New York State.” 

The Attorney General’s investigation found that many of DeVry’s advertisements centered on a claim that 90% of DeVry graduates who are actively seeking employment obtain employment in their field of study within six months of graduation.  The Attorney General’s investigation revealed that the 90% claim was misleading because a substantial number of the graduates included in the figure were graduates who were already employed prior to graduating from DeVry. In fact, many of the graduates included in the 90 percent figure were employed before they even enrolled at DeVry.

In addition, DeVry’s employment outcome statistics inaccurately classified a significant number of graduates as employed in their field of study, when in reality the graduates were not working in their field.  For example, DeVry counted graduates of DeVry’s Technical Management program as “employed in field” where the graduates were employed as retail salespersons, receptionists, bank tellers, and data entry workers.  In some cases, graduates were counted as employed in their field of study despite holding positions that did not require a college degree.

DeVry also mischaracterized certain unsuccessful job-seekers as “inactive,” despite evidence that the graduates had in fact carried out an active, though unsuccessful, job search.  Furthermore, DeVry’s 90 percent claim did not accurately reflect outcomes at all programs offered by DeVry.  Certain programs had employment outcomes that were significantly lower than 90 percent over consecutive years.

DeVry also made inadequately substantiated claims in its advertisements concerning DeVry graduates’ salary outcomes.  For example, some DeVry ads touted that DeVry bachelor’s degree graduates earned 15 percent more one year after graduation than all graduates with bachelor’s degrees from all other colleges and universities.  This claim, which was based on commissioned studies carried out by a third-party entity, was inconsistent with other data DeVry had concerning graduates’ salaries. 

DeVry graduates eligible to participate in the claims process included:  (1) graduates of associates and bachelor’s degree programs at DeVry campuses in New York who began their program between July 2008 and September 2015; and (2) New York residents that graduated from DeVry online associates or bachelor’s programs and who began their program between July 2008 and September 2015.  To be eligible for restitution, graduates had to return a claim form indicating that they were not able to find employment in their field of study within six months of graduation, despite seeking such employment. 

The Attorney General has made cracking down on illegal activity by for-profit colleges a priority. The office reached a $10.25 million settlement with Career Education Corporation for fabricating placement rates, and was part of a settlement with Education Management Company to resolve allegations that the school misled prospective students on program costs, graduate rates, and placement rates. As part of the settlements, EDMC agreed to forgive over $100 million outstanding loan debt.

In July, the office was part of a coalition of Attorneys General that sued the U.S. Department of Education for abandoning critical student protections related to for-profit colleges.

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