DeVry University False Advertising
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For years, DeVry marketed for new students by touting a claim of high employment rates for recent graduates. In the ads, the profit college made claims such as “90% of our grads actively seeking employment had careers in 6 months.” DeVry also claimed that graduates from DeVry would earn more than those graduating with bachelor’s degrees from other colleges or universities. Advertisements making these claims spread far and wide on television, radio, online, in print and other media. However, the claims DeVry made were untrue. As a result of their deceptive advertising, thousands of DeVry graduates and former students are now saddled with student loan debt. A DeVry Consumer Protection Attorney from The Carlson Law Firm is ready to help you.
If you have been cheated by a large corporation and have no idea how to fight back, we are here to help you. For more than 40 years, The Carlson Law Firm has worked hard to protect the rights of those who purchase and use products and services on a daily basis. Deciding which college to attend is a life-changing choice. When making the choice, students take the promises of employment and higher incomes serious. In many cases, DeVry’s fraudulent promises of a better future have left graduates worse off. If you are living with seemingly insurmountable student loan debt and attended DeVry University, call our firm to see how we can help.
What did DeVry Allege in its Advertising?
In 2015, the Department of Education began an investigation into DeVry’s advertisement claims. The agency found that the DeVry advertisements made the following claims in both English and Spanish media:
- The Since 1975 Representation. In its advertising, DeVry claimed that since 1975, 90 percent of its graduates actively seeking employment landed jobs in their field within six months. The claims began as early February 2008 and ran through 2014.
- Its graduates had incomes, on average, 15 percent higher after graduation than the graduates of all other colleges or universities. These claims began in 2013.
The Department of Education requested that DeVry provide data and other information to substantiate its 1975 claim. The agency eventually concluded that DeVry could not provide evidence to back up those claims.
What falsehoods were found DeVry’s advertising claims?
The Department of Education found the for-profit college had, in fact, violated the FTC Act. The FTC Act prohibits “unfair or deceptive or practices” that affect commerce. In addition, they found that DeVry misrepresented or purposefully omitted facts.
They also found that consumers suffered injuries as a result of DeVry’s false advertising. The complaint alleges several instances where DeVry misled consumers. For example, in the 2012 graduating class, DeVry used the following instances toward counting graduates as “working in their field”:
- A Business Administration graduate with a specialization in health services management working as a server in a restaurant.
- Several graduates with technical management majors whose employment was listed as unpaid volunteer positions at medical centers.
- A technical management major with a human resources specialization working as a rural mail carrier.
- A business administration graduate with a health care management specialization working as a car salesman.
In addition, DeVry included graduates who were working in jobs they held prior to enrolling at DeVry—as opposed to those landed after graduation. The FTC’s complaints also allege that DeVry excluded those who were seeking employment from its calculations.
What are student loans?
A student loan is money a student borrows to pay for college expenses. The money can be repaid over time, with certain interest rates. Student loans can be private or federal loans. The loans are typically for thousands of dollars and can be used to cover tuition, room, and board, as well as books.
For-profit colleges and federal student loans
A little-known fact is that for-profit colleges actually originated in the Colonial era. However, the concept of higher education for-profit didn’t really take off until the introduction of the GI Bill in the 1940s. Career colleges began springing up all over the country to prey on veteran’s tuition grants.
Further, President Lyndon B. Johnson’s Higher Education Act of 1965, allowed for-profit colleges to flourish. The Higher Education Act of 1965 amended the laws to include for-profit college in government funding. Under the act, for-profit institutions could now take in Pell grants and federal student loans.
For-profit institutions have predominately preyed on the more vulnerable populations. For example, commercials targeting low-income individuals, people of color and single mothers dominate the airwaves. These populations typically qualify for the federal funding these institutions are after. But upon graduation, many of these students are unable to secure work in their field of study. This limits their ability to pay back the federal student loans they’ve acquired during their time in a for-profit college.
Additionally, while most traditional schools have a 60 percent four-year graduation rate, DeVry’s is only at 23 percent. This means it takes 77 percent of their students longer than four years to graduate and during that time they acquire more student loan debt. For-profit colleges enroll about 11 percent of students nationally. However, they account for about 35 percent of all federal student loan defaults despite the fact they make up a small share of college enrollment numbers.
Student loan defaults
While defaulting on a student loan is widely considered a huge financial mistake, it can also be the result of unfortunate circumstances. Student loans are considered to be in default when a person misses nine or more payments. Studies show that for-profit colleges default at a rate about four times more than students at community colleges using the same 12-year time frame.
The Gainful Employment Rule
Under President Barack Obama, the Department of Education began to crack down on for-profit colleges. This was in part because of the growing number of complaints that students were being lured in by these colleges with misleading promises and being saddled with debt they were unable to repay. The Obama Administration introduced the gainful employment rule which requires colleges to track their graduates’ performance in the workforce. If the graduates do not perform well, the government will cut off federal funding to those institutions.
However, the new administration immediately began taking aim at the Obama-era rules. For example, the Trump Administration rolled back the gainful employment rule in August 2018. This eliminated obstacles that many for-profit colleges face—allowing for-profit institutions to continue preying on students using federal loans.
The DeVry FTC Settlement
The FTC filed a lawsuit against the for-profit college for its deceptive advertising practices. The company agreed to a $100 million settlement—with $49.4 million in cash set aside for qualifying students. DeVry benefitted greatly from its claims and saw its enrollment numbers climb to nearly 70,000 during the years the ads ran.
Should I file a lawsuit against DeVry?
The FTC settlement only partially compensates DeVry graduates and students. According to the FTC, the settlement will pay $49.4 million in cash to be distributed to “qualifying” students who were harmed by the deceptive ads, as well as provide certain types of debt relief. The debt being forgiven includes the balance owed on private unpaid student loans that DeVry issued to undergraduates between September 2008 and September 2016, and student debts owed to DeVry for items such as tuition, books and lab fees.
However, no debt relief is provided for other types of student loans or debt. Despite the seemingly large amount of cash in the settlement, the FTC also states that refunds will be limited to “a percentage of the total amount you paid.” The FTC sent “partial refunds” to students, but these “partial refunds” did not include debt or loan forgiveness under the settlement. On average, those who received partial refunds only received about $280.
If you have a significant amount of debt from DeVry University, contact The Carlson Law Firm to speak with a qualified DeVry Consumer Protection Attorney. We can help you determine if filing a lawsuit is the right option for you.
Veterans Using VA Education Benefits
The Post 9/11 GI Bill, provides education benefits for servicemembers who have served on active duty for 90 or more days since Sept. 10, 2001. These benefits are tiered based on the number of days served on active duty.
If you are a veteran who used this benefit towards a degree at DeVry University but were unable to obtain a job upon graduation, you may qualify for refunds and compensation beyond the FTC settlement.
In a letter reprimanding DeVry University, Curtis Coy, the VA Deputy Undersecretary of Economic Opportunity said, “VA is suspending DeVry University’s status as a [Principles of Excellence] institution at least until the conclusion of the FTC lawsuit.”
The letter cites three reasons for the suspension:
- A lawsuit filed against DeVry by the Federal Trade Commission
- Limitations imposed on DeVry by the Education Department, in concert with the FTC action
- Complaints lodged against DeVry by students in the VA GI Bill Feedback System
“The FTC findings, [Education Department] conclusions and GI Feedback System complaints indicate that DeVry University has not acted in accordance with … Principles of Excellence guidelines,” the letter said.
Other qualifying benefits include:
- Montgomery GI Bill
- Vocational Rehabilitation and Employment (VR&E) program, VA Loan Chapter 38
Know Your Rights
As a current or former DeVry student, you may have a claim against DeVry, even if you receive some cash or debt relief from the FTC settlement. Many states, including Texas, have consumer protection laws that prohibit businesses from making false, misleading, or deceptive representations. In Texas, this is known as the Deceptive Trade Practices-Consumer Protection Act, often referred to simply as the DTPA. The primary purpose of the DTPA is to protect consumers against false, misleading, and deceptive business practices. The DTPA gives consumers the right to sue for damages.
The Carlson Law Firm is currently representing more than 100 plaintiffs in a Texas action against DeVry.
How The Carlson Law Firm Can Help You
If you decided to become a DeVry student because ads claiming a high employment rate or higher income for graduates, you may be entitled to compensation. The Carlson Law Firm is currently investigating claims against DeVry for current and former students. We believe you may be eligible for refunds and compensation, even if you receive some benefits from the FTC settlement program.
If you or someone you loved attended DeVry in reliance on DeVry’s representations of a high employment rate or higher income for its grads, contact us today for a free, no-obligation consultation.
The Carlson Law Firm works on a contingency fee basis, so we only get paid if you do.