DeVry University-FTC $100M Settlement Provides Student-Debt Forgiveness

DeVry University and its parent company have agreed to pay $100 million as part of a settlement with the U.S. Federal Trade Commission to resolve allegations that the for-profit institution misled prospective students with ads touting high-income jobs upon graduation.

The FTC said the settlement includes $49.4 million in cash to be distributed to “qualifying students who were harmed by the deceptive ads, as well as $50.6 million in debt relief.”
The debt being forgiven includes the full balance owed — $30.35 million — on all private unpaid 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.”
The FTC’s complaint charged that DeVry misled consumers in violation of the FTC Act by claiming that 90 percent of graduates actively seeking employment landed jobs in their field within six months of graduation. Advertisements making these claims appeared on television and radio, as well as online and in print and other media.
The proposed federal court orderrequires DeVry to notify the students who will receive debt relief, and to inform the credit bureaus and collection agencies of the debt forgiveness. All loan and debt forgiveness will occur automatically, says the FTC.
DeVry will also release transcripts and diplomas previously withheld from students because of outstanding debt and will cooperate with future requests for diplomas and transcripts and related enrollment or graduation information, the U.S. agency says.

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