One month after DeVry Education Group agreed to pay $100 million to settle federal regulatory charges that it used deceptive ads to recruit students, the for-profit educator has come to a multimillion-dollar settlement that should close the book on one state-level investigation.
New York Attorney General Eric Schneiderman’s office announced the $2.75 million settlement this morning. This puts an end to the state’s investigation, which alleged that DeVry used exaggerated claims about its graduates’ job-placement success, and about how much money these DeVry grads had earned.
The investigation into DeVry centered on the company’s claim in ads that 90% of students who were actively seeking employment obtained jobs in their field of study within six months of graduation.
According to the AG’s office, the 90% claim was misleading because a substantial number of graduates included in the figure were graduates who were already employed prior to graduating or even enrolling at the school.
In some cases, DeVry also inaccurately claimed that a significant number of graduates were employed in their field of study, when they were not, the AG’s complaint alleges.
For example, the AG’s office claims that DeVry counted graduates of its Technical Management program as “employed in field” when they were really working as retail salespeople, receptionists, bank tellers, and data entry workers.
Other graduates were considered to be “employed in field” when they held positions that did not require a degree. Additionally, when students failed to find a job in their field, DeVry allegedly misclassified them as “inactive.”
In addition to allegedly misleading prospective students with the 90% claim, the AG’s office also accused DeVry of overstating graduates’ salaries.
For example, DeVry ads claimed bachelor’s degree graduates earned 15% more one year after graduation than all graduates with bachelor’s degrees from all other colleges and universities. In reality, the AG’s office found that rates were inconsistent with DeVry data.
Under the New York settlement, DeVry will pay $2.25 million to associates and bachelor’s degree graduates at DeVry’s New York campuses and New York residents who attended DeVry’s online school. Additionally, the company has agreed to pay $500,000 in penalties and reform its practices concerning representation of graduates’ employment and salaries.
Tuesday’s settlement is just the latest for DeVry. Last month, the company agreed to pay $100 million to students in order to settle an FTC lawsuit that claimed the school’s advertising misled would-be students about how likely a DeVry degree is to get them a job.
Prior to that settlement, the Department of Education provided notice to the school in Jan. 2016 that it would be required to stop certain advertisements regarding post-graduation employment outcomes and take additional steps to ensure the school can substantiate employment claims.
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