Are For-Profit Schools Lying About Employment Statistics?

Posted on February 29, 2016 at 12:00pm by
Will PSLF survive?

Unscrupulous colleges and universities are taking advantage of people who want to obtain an education and achieve better lives. For-profit schools do not care about helping students achieve these goals, and are instead concerned with making money. How do we know this?

The Federal Trade Commission (FTC) just filed a lawsuit against DeVry University, arguing the institution falsified post-graduate employment statistics to attract new students. According to the lawsuit, DeVry claimed 90 percent of its graduates found gainful employment within their chosen areas of study. The lawsuit also claims DeVry printed ads arguing its students had 15 percent more income after graduating. What do the facts say? DeVry might be lying.

FTC officials claim DeVry counted one graduate as “working in his field”, when in fact, he was working as a waiter at Cheesecake Factory. The graduate was using his ‘business degree’ to take orders for cheesecake, pasta and salads. Other graduates were counted as ‘working in their fields’ while employed at the same jobs they had before graduation.

DeVry is not the only for-profit institution to be accused of falsifying post-graduation employment statistics. Corinthian Colleges Inc., which is now shut down, was fined and sued by the state of California for the exact same business practices.

Many former students and graduates took out tens of thousands of dollars in student loans to attend for-profit institutions under the assumption it would lead to a better life. It would be wrong to allow these institutions to escape justice.

Consumer Agencies Declare War on For-Profit Schools

Federal consumer protection agencies are fighting back against shady for-profit schools. The Consumer Financial Protection Bureau sued Corinthian Colleges, and a federal judge ordered it to pay back hundreds of millions in damages to former students. With DeVry now facing a lawsuit, we can start to see a new pattern developing. How many more for-profit institutions will be sued or shut down?

It is likely future lawsuits will continue to shut down or fine these fraudulent institutions, and it is also possible some graduates or former students could have their loans forgiven.

The Sader Law Firm is a Kansas City bankruptcy law office dedicated to helping the people of Missouri and Kansas overcome significant financial struggles.