In Addition To Restitution, A.G. Settlement Requires Devry To Reform Advertising Practices And Pay $500,000 In Penalties, Fees, And Costs
Attorney General Eric T. Schneiderman today announced a settlement with for-profit education company DeVry Education Group, Inc. and its subsidiaries DeVry University, Inc. and DeVry/New York, Inc. (collectively, “DeVry”). The settlement resolves an investigation that revealed that DeVry lured students with ads that exaggerated graduates’ success in finding employment at graduation and contained inadequately substantiated claims about graduates’ salary success. Pursuant to the agreement, DeVry will pay $2.25 million in consumer restitution and $500,000 in penalties, fees and costs.
“DeVry used misleading claims to lure in students who were simply seeking a college degree, greatly exaggerating job and salary prospects for graduates” said Attorney General Schneiderman. “I’m pleased that this settlement provides much-deserved restitution to students who were misled, and requires DeVry to stop its false advertising.”
DeVry is headquartered in Illinois and operates fifty-five campuses throughout the country, including three in New York City. DeVry also offers online college programs.
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 90% figure were graduates who were already employed prior to graduating from DeVry. In fact, many of the graduates included in the 90% 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% claim did not accurately reflect outcomes at all programs offered by DeVry. Certain programs had employment outcomes that were significantly lower than 90% 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% 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.
The settlement requires DeVry to pay $2.25 million in restitution. The restitution will be used to compensate eligible graduates of associates and bachelor’s degree programs at DeVry’s New York campuses and New York residents that graduated from DeVry’s online associates and bachelor’s degree programs. The settlement also requires DeVry to pay $500,000 in penalties, fees, and costs and to reform its practices concerning representations of graduates’ employment and salary outcomes.
DeVry recently reached a separate settlement with the Federal Trade Commission (“FTC”) concerning its advertising practices. New York DeVry graduates may be eligible to receive restitution under both settlements. Restitution obtained pursuant to the Attorney General’s settlement will be distributed pursuant to a claims process. Graduates eligible to participate in the claims process will receive a claim form by mail.
DeVry graduates eligible to participate in the claims process include: (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. Such graduates will be eligible to receive restitution under the Attorney General’s settlement where the graduate timely submits a claim form that indicates that the graduate was not employed in her field of study within six months of graduation, despite seeking in-field employment.
