Story at a glance
- The U.S. Department of Education announced nearly 16,000 student borrowers will get $415 million in borrower defense.
- About 1,800 former DeVry University students are part of that borrower defense, after the department found Devry claimed a 90 percent job placement rate.
- The department found DeVry’s actual job placement rate to be around 58 percent.
Thousands of students have filed fraud complaints against their university or college and now many are set to have their student loan debts erased as the U.S. Department of Education approved $415 million in borrower defense claims.
The U.S. Department of Education announced Wednesday that nearly 16,000 student borrowers will receive $415 million in borrower defense, a legal provision that promises loan relief for defrauded borrowers, after it found multiple schools misled students.
Devry University was found to have misrepresented its job placement rates, alongside new findings related to Westwood College, the nursing program at ITT Technical Institute and the criminal justice programs at Minnesota School of Business/Globe University and Corinthian Colleges.
Approximately 1,800 former DeVry University students will get about $71.7 million in full borrower defense discharges after the Department found the school made widespread, substantial misrepresentations about its job placement rates — and that number is expected to grow as the department continues to review outstanding claims from former DeVry students.
“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards. 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,” said Miguel Cardona, U.S. Secretary of Education, in a statement.
From 2008 to 2015, DeVry advertised that 90 percent of its graduates who actively seek employment got jobs in their field of study within six months of graduation. The Department found that to be false and that DeVry’s actual job placement rate was around 58 percent, as more than half of the jobs included in the claimed 90 percent placement rate were held by students who got a job well before graduating from DeVry and before they had even enrolled at the school.
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The department also noted that DeVry excluded the large number of students who were actively looking for work but weren’t conducting their job search in a way that the University’s Career Services department preferred.
On top of all that, the department found that senior DeVry officials knew the 90 percent job placement rate was problematic for years, partly due to concerns about its accuracy that were raised by alumni.
DeVry has been in hot water before over its disputed 90 percent job placement rate, as well as advertising that graduates with bachelor’s degrees from DeVry on average had 15 percent higher incomes one year after graduation than graduates with bachelor’s degrees from all other colleges and universities.
That prompted lawsuits by former students against the university and eventually in 2016 the Federal Trade Commission (FTC) reached a $100 million settlement with DeVry, which included $49.4 million to be paid in cash to qualifying students who were harmed by the deceptive claims and $50.6 million in additional debt relief.
Misleading claims by universities appeared to be a trend, as the department said that Westwood College also made substantial misrepresentations to students about their salary potential and likelihood of finding a job after graduation. The college also made misleading claims about the ability to transfer credits and that students in its criminal justice program in…
Read More: Education department to erase $415M in student loan debt for nearly 16K borrowers – The Hill