FTC Alleges DeVry Misled Students About Employment &Income Prospect; Stock Down

(RTTNews) - The U.S. Federal Trade Commission has filed suit against the operators of DeVry University, alleging that DeVry's advertisements deceived consumers about the likelihood that students would find jobs in their fields of study, and would earn more than those graduating with bachelor's degrees from other colleges or universities.

DV closed Wednesday trading at $20.09, down $3.65 or 15.37%. In the after-hours, the stock further dropped $0.10 or 0.50%.

In its complaint against DeVry, the FTC alleges that the defendants' claim that 90 percent of DeVry graduates actively seeking employment landed jobs in their field within six months of graduation was deceptive. The complaint charges that another key claim made by DeVry, that its graduates had 15 percent higher incomes one year after graduation on average than the graduates of all other colleges or universities, also was deceptive.

The complaint notes that these claims appeared in the defendants' advertising on television, radio, online, print and other media. The 90 percent claim was central to their marketing efforts since at least 2008 and the income superiority claim began in 2013.

The FTC's complaint also alleged that DeVry excluded graduates from their count of those "seeking employment" as inactive when they were in fact actively seeking employment.

The FTC's complaint alleged that Defendants had reason to question the reliability of the conclusions and information contained in a third party survey and report that DVU used as the basis for the income superiority claim. In addition, according to the complaint, comparing income information that Defendants obtained directly from its graduates with publicly available income data showed that DVU graduates did not in fact earn significantly more than graduates from all other schools combined a year after graduating.

In a related action, the U.S. Department of Education or ED is also taking action against DeVry for its marketing practices.

Responding to the suit, DeVry Education Group Inc. (DV) said it intends to vigorously contest a complaint filed by the Federal Trade Commission, challenging the employment and earnings outcomes of DeVry University graduates.

DeVry Group also said that the Department of Education has taken an administrative action related more narrowly to certain DeVry University records for the period 1975 to 1983. The company intends to request a hearing on the Department's decision, and will collaborate closely with the Department to demonstrate compliance and resolve this matter satisfactorily.

DeVry Group believes that the FTC's complaint - filed 40 years after DeVry University began publishing accurate graduate employment statistics - is without a valid legal basis. In addition, the FTC's complaint contains anecdotal examples that exaggerate the allegations but do not prove them. DeVry University measures the employment and earnings results of its graduates on a sound, rational and transparent basis, and has published these results in a consistent manner over the years to provide students meaningful information.

There is no national standard for calculating employment statistics among higher education institutions, and the measures and standards used by DeVry University to support its statistics are appropriate. Indeed, a taskforce of 39 state attorneys general and the District of Columbia recently developed a methodology very similar to the one DeVry University has had in place for years. And while many other institutions of higher education provide employment statistics, DeVry University's measures are more rigorous and further substantiated than most.