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DeVry agrees to stop using ad claim that it couldn't back up

October 13, 2016 - 1:44 PM

DeVry University is dropping one of its marquee advertisement claims after the federal government found there was no evidence to support it.

One of the nation's largest for-profit college chains, DeVry has long advertised that 90 per cent of its alumni since 1975 found employment in their fields of study within six months of graduation. The claim has been featured in advertisements online, in magazines and over the radio since at least 2008.

But in a settlement with the Department of Education announced on Thursday, the Illinois-based chain agreed to stop using the statistic. The department began investigating the claim last year and ordered DeVry to prove it. Federal officials say the evidence that DeVry provided ultimately fell short.

"Students deserve accurate information about where to invest their time and money, and the law is simple and clear: Recruitment claims must be backed up by hard data," Education Secretary John B. King Jr. said in a statement.

DeVry officials said they provided supporting evidence from 1980 onward, but that they didn't have detailed enough data from 1975 to 1980. In a statement provided by DeVry spokesman Ernest Gibble, company officials said they were pleased to resolve the case "in full co-operation with the department."

The settlement requires DeVry to provide a $68 million reserve that the department can use as a form of insurance for any liabilities caused by DeVry. For example, it could be used to help refund students if the chain suddenly shuts down. The department is also increasing its financial scrutiny of the chain.

DeVry still faces a separate lawsuit filed by the Federal Trade Commission in January alleging deceptive advertising. Along with the claim that DeVry agreed to drop, the commission is challenging a claim that DeVry graduates earn 15 per cent more than alumni at other schools a year after graduation.

The Education Department said it will continue to support the commission in that case and to continue its own investigation into the chain.

DeVry University, one of several college chains owned by the DeVry Education Group, enrolled 26,000 undergraduate students this year at 60 campuses across the U.S., according to recent federal filings. Like many other for-profit colleges, DeVry University has suffered heavy enrolment losses since the industry peaked in 2010.

It's also one of many for-profit colleges facing increased pressure from the federal government. The administration of President Barack Obama has cracked down on the for-profit industry in recent years, adding new regulations and taking action against colleges that have been accused of deception, aggressive recruiting tactics and other misconduct.

The ITT Technical Institute chain was one of the nation's largest for-profit groups until it shut down all 130 campuses in September, saying it couldn't survive sharp sanctions dealt by the Education Department amid accusations of fraud.

It followed the closure of the Corinthian Colleges chain, which agreed to sell or close more than 90 U.S. colleges in 2014 amid a fraud investigation over advertising practices.

News from © The Associated Press, 2016
The Associated Press

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