By Charlene Crowell
NNPA Newswire Columnist
For the third time in two years, a large for-profit college has faced charges of defrauding its students. This time the charges stem from promises of jobs and incomes that never materialized.
On December 15, the suburban Chicago-based DeVry University agreed to a $100 million settlement to end a lawsuit filed by the Federal Trade Commission (FTC). Filed in January, the FTC charged that from 2008 to 2015 the for-profit institution engaged in deceptive marketing and advertising.
According to FTC, prospective DeVry students were told in recruitment and in advertising that 90 percent of its graduates secured employment in their chosen fields within six months of matriculation. A second institutional promise was that one year following graduation they would earn incomes that were 15 percent higher than those earned by graduates from other colleges and universities.
Under the settlement terms, DeVry will pay $49.4 million in cash to qualifying students who were harmed by the deceptive ads, as well as provide $50.6 million in debt relief. The debt being forgiven includes the full balance owed—$30.35 million—on all unpaid private student loans that DeVry issued to undergraduates between September 2008 and September 2015, and $20.25 million in student debts for items such as tuition, books and lab fees.
“When people are making important decisions about their education and their future, they should not be misled by deceptive employment and earnings claims,” said FTC Chairwoman Edith Ramirez. “The FTC has secured compensation for the many students who were harmed, and I am pleased that DeVry is changing its practices.”
Once approved by federal courts, DeVry will be required to immediately notify the students who will receive debt relief as well as credit bureaus and collection agencies of the impending debt forgiveness. DeVry will also release transcripts and diplomas previously withheld from students due to outstanding debt, and will cooperate with future requests for diplomas and transcripts and related enrollment or graduation information.
This most recent settlement is yet another reminder of how some of the largest for-profit colleges have failed their students and caused them to become indebted without the educational credentials promised.
California’s Bureau for Private Postsecondary Education issued an emergency decision on August 26, directing ITT Tech and its subsidiaries to cease enrollment of any new students at 15 locations across the state. At the time, the for-profit school was also under investigation by other state and federal offices.
Once the Accrediting Council for Independent Colleges and Schools (ACICS) determined that ITT Tech was “not in compliance”, and was “unlikely to become in compliance” with accreditation standards, it lost access to federal student aid before ceasing operations of its national online programs as well as its 130 campuses located in 38 states. As many as 45,000 students had been enrolled at ITT Tech.
Just days before Christmas, John King, U.S. Secretary of Education, upheld a September decision that terminated the Department’s recognition of ACICS as the accrediting agency for nearly 240 institutions – most of which were for-profits. Education determined that ACICS failed to meet several regulator criteria and was therefore out of compliance.
Unfortunately, these two colleges and universities often perpetrated their frauds against veterans and people of color.
The men and women who earned GI benefits, as well as Black and Latino consumers — many of whom are first-generation college students, do not deserve to be exploited in the pursuit of higher education.
“There must be more vigorous efforts to prevent schools that use deceptive practices from accessing federal student aid in the first place,” remarked Whitney Barkley-Denney, a policy counsel with the Center for Responsible Lending. “We’ve seen the fallout from these abusive recruitment practices over and over again.”
