DeVry Education Group Inc. will maintain access to federal funding, its main source of revenue, under a deal with regulators that resolved a claim that the for-profit college chain ran advertisements inflating its graduates’ employment success.
Source: DeVry Settles Claims of Misleading Ads About Graduates’ Success Rates
The settlement agreement announced Thursday likely allows the company to avoid the fate of two of its competitors, Corinthian Colleges Inc. and ITT Technical Institute. Those companies collapsed over the past 18 months after the government cut off their access to federal funding over allegations of bad behavior.
DeVry said it agreed to stop claiming in advertisements that 90% of its alumni found jobs in their field of study within six months of graduation, a statistic that the Education Department called “unsubstantiated.” The company also agreed to keep at least $68 million in reserves, called a letter of credit, for five years.
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