Antitrust Law Daily Wrap Up, ADVERTISING NEWS: FTC charges DeVry with misleading students about employment, income prospects, (Jan 27, 2016)

By Linda O’Brien, J.D., LL.M.

The FTC has filed a complaint 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, the agency announced today (FTC v. DeVry Education Group Inc., File No. 132-3278).

In its complaint, the FTC alleges that DeVry’s claim that 90 percent of its graduates actively seeking employment found 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 than the graduates of all other colleges or universities—also was deceptive.

According to the complaint, 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. Further, DeVry counted numerous graduates as working “in their field” when they were not. The complaint also alleges that DeVry’s calculations included graduates who were working in jobs they held prior to enrolling at DeVry, as opposed to those they landed after graduating.

In addition to counting these and other graduates as working “in their field,” the FTC’s complaint alleges that DeVry excluded graduates from their count of those “seeking employment” as inactive when they were in fact actively seeking employment. This included, for example, a graduate who had viewed more than 175 job openings in DeVry’s jobs database, interviewed for six jobs in the two months prior to being classified as inactive, repeatedly e-mailed the DeVry career services department, and attended a DeVry career fair.

The FTC’s complaint alleges that DeVry had reason to question the reliability of conclusions and information contained in a third-party survey that served as the basis for the income superiority claim. According to the complaint, comparing income information that DeVry obtained directly from its graduates with publicly available income data showed that its graduates did not in fact earn significantly more than graduates from all other schools combined a year after graduating.

The complaint was filed in the U.S. District Court for the Central District of California.

In a separate statement, Commissioner Maureen Ohlhausen expressed concerns about the effect that any remedy in the case might have on the school’s ability to continue to offer valuable educational programs to students. She urged the Commission to take those concerns into consideration when pursuing a resolution of the case that is tailored to the harms alleged in the FTC complaint.

In a related action, the U.S. Department of Education is also taking action against DeVry for its marketing practices. The department notified DeVry that it will be requiring the institution to stop certain advertising regarding the post-graduation employment outcomes of its students and to take additional steps to ensure that DeVry can substantiate the truthfulness of its post-graduation employment outcomes.

“Millions of Americans look to higher education for training that will lead to meaningful employment and good pay,” said FTC Chairwoman Edith Ramirez. “Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn.”

Companies: DeVry University, Inc.

News: Advertising ConsumerProtection FederalTradeCommissionNews