Education Department to Erase Debt of Defrauded DeVry University Students

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Photo of a graduation cap on a pile of U.S. 100 dollar bills

The U.S. Department of Education announced this week that it will provide nearly $72 million in borrower defense discharges to close to 1,800 former DeVry University students who were misled about their job placement opportunities.

The debt erasure marks the Education Department’s most recent action against the for-profit university, which previously paid more than $100 million in settlements to the Federal Trade Commission and the attorneys general of New York and Massachusetts over false advertising claims.

It is also the first time the department has approved borrower defense claims against an institution that is still in operation.

“When colleges and career schools put their own interests ahead of students, we will not look the other way,” Federal Student Aid Chief Operating Officer Richard Cordray said in a statement.

The department found that from 2008 to 2015, DeVry claimed in advertisements that its job placement rate within six months of graduation was 90 percent. In reality, fewer than half the careers counted in these numbers were attributable to the university, and its actual placement rate was closer to 58 percent.

The number of discharge approvals is expected to grow as more former DeVry students submit claims.

“The Department remains committed to giving borrowers discharges when the evidence shows their college violated the law and standards,” Education Secretary 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 promised.”