University busted for claiming it gets 90 percent of grads jobs
In yet another blow to the for-profit college industry, DeVry University has agreed to stop claiming job placement rates that it can't prove.
The agreement is part of a settlement DeVry reached with the Department of Education, the DoE announced on Thursday. DeVry was claiming in marketing materials that, since 1975, 90 percent of its students had a job in the field of study within six months of graduation. That's a great statistic and would prove very alluring to prospective students, many of whom rely on federal student loans to be able to pay for DeVry. When the DoE asked DeVry to prove the 90 percent figure, it says, the school "could not provide evidence to substantiate this claim." If DeVry is anything like its former fellow for-profit school Corinthian Colleges, that's because the real number is nowhere near what DeVry was claiming.
Per the terms of the settlement, DeVry can no longer make any job placement claims that include "since 1975" in them and has to have proof to back up any job placement claims it does make. It must also place what amounts to a Disclosure of Shame that it did not have necessary "since 1975" receipts for two years in a "prominent" spot on its website. Finally, the school must provide a letter of credit of $68.4 million, which is 10 percent of how much the school took in in federal aid loans for the 2014-15 school year.
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For-profit school ITT Technical Institute suddenly closed its doors in September after the DoE demanded that it provide a letter of credit amounting to 40 percent of its federal aid loan revenue and also ruled that it could not enroll new students using federal financial aid, effectively putting an end to a major source of its income. DeVry's punishment so far isn't that extreme: It can still enroll new students on federal aid but only as part of a provisional program, and that ability can be revoked if it doesn't meet certain guidelines.
DeVry responded by saying that it was only unable to prove the required student-specific job placement data from 1975 to 1980, and that it was "pleased to have resolved" the matter. But it hasn't resolved everything. DeVry noted that the DoE's investigation is still ongoing, and the DoE's announcement mentioned that the Federal Trade Commission's lawsuit against DeVry, which accuses the school of lying about the job placement rates and earning potential of its graduates in its ads, is "ongoing."
The investigation is part of the Obama administration's crackdown on for-profit schools, which take in billions of federal financial aid money every year, leaving students with debts that are almost impossible to discharge and none of the promised job opportunities to show for it. It seems that prospective students are paying attention: For the 2016-17 school year, major for-profit school chains such as University of Phoenix, Hondros College, and, yes, DeVry, saw their enrollments decrease by double-digit percentages compared to the year before.
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