DeVry U. accused of using phony job placement rates

The entrance to the DeVry campus in Miramar
The entrance to the DeVry campus in Miramar AP

In today’s economy, college graduates can struggle to get jobs, but DeVry University wooed thousands of students with a bold promise: 90 percent job placement among those who sought work.

Recruiters at the for-profit college emphasized the 90 percent figure during sit-down sessions with prospective students. DeVry’s TV commercials announced 90 percent. The company’s Twitter account proclaimed “90% of #DeVry grads active in the job market find employment in their field of study within 6 months.”

But it wasn’t true, the federal government now says.

On Wednesday, the Federal Trade Commission sued DeVry, which operates three Florida campuses, including one in Miramar, for “deceptive” recruiting practices. The company is one of the nation’s largest for-profit colleges, with 50-plus U.S. campuses, and more than 41,000 students. In addition to the disputed 90 percent number, the FTC alleges DeVry also falsely advertised that its graduates “earn 15% more than graduates from other colleges and universities.”

“We allege that DeVy made this claim even though its own internal data showed no meaningful difference between the salaries of DeVry graduates and those of all other schools combined,” said FTC chairwoman Edith Ramirez in a conference call with reporters.

DeVry denies wrongdoing. Its parent company, DeVry Education Group, released a statement Wednesday that “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.”

Devry, like most for-profit colleges, relies on taxpayer-funded federal Pell grants and student loans for most of its revenue. Between 2008 and mid-2015, the college had revenues of more than $8.6 billion, according to the FTC.

The FTC suit alleges that DeVry fudged the numbers on its 90 percent job placement rate by leaving out some out students who weren’t finding jobs. This was done by classifying the students as not actively seeking employment, even though that wasn’t the case, the FTC says.

According to the FTC, DeVry also boosted its job placement numbers by counting students as placed in their field even when that clearly wasn’t accurate. Examples of DeVry’s “in field” placements cited in the lawsuit include:

▪ A graduate from the technical management degree program working as a mail carrier.

▪ A business administration graduate working as a waiter at the Cheesecake factory.

▪ A business administration graduate working as a secretary at a prison.

▪ A technical management graduate working as a sales associate at Macy’s.

A recent Miami Herald investigation, Higher-Ed Hustle, showed how for-profit colleges have used aggressive recruiting to grow enrollments. The industry now accounts for nearly one in five Florida students, but some ex-students complain they are left with heavy debts and few job prospects.

One former student at DeVry’s Miramar campus told the Herald that the school’s recruiter made it seem like his project management degree would lead to guaranteed employment. But after graduating in 2011, the student, who asked to be identified only by his first name, Luis, said he never got a callback from the more than 50 job postings he applied for.

Luis said he has $30,000 in student loans, and is working the same type of job he had before enrolling at DeVry, as a medical device technician.

“The $30,000 that I spent there, it was a waste of money, like you’re throwing money into the ocean,” he said.

The FTC lawsuit seeks an injunction against DeVry’s deceptive practices, as well as financial penalties to help make students whole, which could include some form of restitution. Also on Wednesday, the U.S. Department of Education began an administrative process demanding that DeVry “cease making certain representations regarding its students’ postgraduation employment outcomes.”

In its statement, DeVry said it would request an administrative hearing to fight the Department of Education’s action. DeVry noted that “there is no national standard for calculating employment statistics among higher education institutions.”

More than two decades ago, in 1991, a U.S. Senate committee recommended the Department of Education create a standard definition of a job placement to help curb abuses in the for-profit college industry. That never happened.

Stephen Burd, a senior policy analyst at the New America foundation who has written extensively about for-profits, said repeated job placement scandals in the industry call for the feds to set some ground rules on what constitutes a job.

“In general, the schools shouldn’t be lying and misrepresenting their stuff,” he said. “But I think that the government has made it easier for them to, up until now, get away with this.”