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DeVry to pay misled students $49.4M, forgive $50.6M in loans

The Federal Trade Commission has negotiated a settlement in its deceptive advertising lawsuit against DeVry University. Previously, two separate groups of former DeVry students had sued the university over inflated graduate employment claims, but both suits have already been settled.

In its advertising, DeVry claimed that around 90 percent of its graduates landed jobs within six months of graduation provided they actively sought employment. Prospective students were impressed, and many relied on those claims when deciding what college to attend.

What those students didn't know was that DeVry was counting graduates who already had jobs when they enrolled -- students who were upgrading their skills rather than training for a new career. According to the FTC, DeVry misleadingly counted a substantial number of such graduates when it claimed its 90-percent job placement success rate.

DeVry counted graduates with existing jobs among those it helped place

Some students who enter college already have jobs. Some take time off with their employers' full support, or even tuition assistance, so they can learn skills their employers need. Others attend college at night or online while continuing to work full time.

In such cases, the college contributes nothing to their job placement, so it shouldn't get to include these students in its calculation of job placement success. The FTC determined DeVry's 90-percent job placement claim to be false and unsubstantiated, and filed suit in federal court.

DeVry has denied making any false or deceptive claims, and the settlement does not require the company to admit any wrongdoing. It does provide $100 million in relief to students who were harmed by the allegedly deceptive advertising: $50.6 in loan forgiveness and $49.4 in cash.

In addition, the settlement includes a proposed court order prohibiting DeVry from making similar misrepresentations in the future. DeVry would be ordered to comply with a number of good-governance procedures. For example, it would also be required, for the next 20 years, to identify all employees at any level who engage in promoting the school and train them on avoiding prohibited behavior.

"The FTC has secured compensation for the many students who were harmed," said a spokesperson, "and I am pleased that DeVry is changing its practices."

If the proposed settlement is approved by the federal court, current and former DeVry students will be notified by mail or email if they are entitled to loan forgiveness or monetary compensation.

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