Nov 02, 2016 12:12 PM EDT
For-Profit University Pays Settlement For Deceiving Students
For-profit college DeVry University has reached a settlement with the Education Department. This comes after the school was found to have deceived its students with is job placement claims.
U.S. News reported that DeVry University has agreed to withdraw its misleading claims about its graduate employment rates and income levels. The settlement comes as a result of a 2015 suit against the institution to prove that its claims on its ads, through print, radio, TV and online, can be backed by facts.
DeVry claimed that 90 percent of its graduates were able to land a job just within six months after they earned their degrees. The university also professed that its alumni earned 15 percent more than those who graduated from other colleges.
"The settlement doesn't limit access to federal funding," Ernest Gibble, a DeVry Education spokesman, wrote in an email to the publication. "It will have no impact on students' ability to access federal financial aid."
This is not the first time that the school has faced this issue. In January, the Federal Trade Commission also sued the university with the same allegations.
The Department of Education has released the settlement agreement with DeVry University. The school is expected to "immediately cease publishing" inaccurate claims to a student, prospective student, accrediting agency, state agency, the Secretary of Education or any member of the public.
According to The Wall Street Journal, the settlement agreement may have saved the company from succumbing to the same fate as two of its competitors, former for-profit institutions Corinthian Colleges Inc. and ITT Technical Institute. Both companies have been shut down.
DeVry University has also agreed to keep a minimum of $68 million in reserves for five years. The Department of Education expects the reserves, called a letter of credit, to be used to cover costs such as reimbursement of student loans. This amount is equivalent to 10 percent of the money that the company received last year through the federal student-aid program.
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