The U.S. Department of Education will discharge $415 million in student loans for nearly 16,000 borrowers who attended DeVry University and other for-profit schools accused of defrauding or misleading students.
The agency announced the news on Wednesday, Feb. 16, following an investigation into DeVry, Westwood College, ITT Technical Institute’s nursing program and Minnesota School of Business/Globe University’s criminal justice program.
The investigation found that from 2008 to 2015, DeVry “repeatedly misled prospective students across the country with claims that 90 percent of DeVry graduates who actively seek employment obtained jobs in their field of study within six months of graduation,” the Education Department said in a news release.
DeVry’s actual job placement rate was around 58%, the investigation found. More than half of the jobs included in the claimed 90% placement rate were held by students who got the jobs long before graduating from DeVry and often before they even enrolled.
“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” U.S. Secretary of Education Miguel Cardona said in a statement. “Students count on their colleges to be truthful. Unfortunately, today’s findings show too many instances in which students were misled into loans at institutions or programs that could not deliver what they’d promised.”
DeVry University spokesperson Donna Shaults told CNBC that the school’s board and leadership have changed since the government first made the allegations.
“Nonetheless, we do believe that the Department of Education mischaracterizes DeVry’s calculation and disclosure of graduate outcomes in certain advertising, and we do not agree with the conclusions they have reached,” Shaults said.
Westwood College was accused of similar wrongdoing. The Education Department found that between 2002 and 2015, Westwood made false claims about its job placement rates and the salaries of those who graduated, according to the press release.
Among the Education Department’s other findings:
- ITT Technical Institute inaccurately told students that its nursing program would acquire programmatic accreditation. The school repeatedly failed to meet standards for accreditation.
- Minnesota School of Business and/or Globe University misled criminal justice students by telling them they could become Minnesota police officers or parole/probation officers after graduating. The school doesn’t have the proper accreditation or certifications for its students to move into such roles.
In addition, the Education Department approved $284.5 million in discharges to more than 11,900 students who attended institutions such as Corinthian Colleges and Marinello Schools of Beauty and whose applications were reviewed after earlier announcements of relief.
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