DeVry University Sued For Deceptive Advertising

While watching television, many of the numerous advertisements that you come across are promoting colleges and universities. Whether the consumer recognizes it or not, universities are a business, they have a product (education) that they are trying to sell to consumers (students). Although the “product” that colleges and universities are selling is not tangible, that does not take away the fact that many tactics and techniques are used to persuade students to enroll. Despite universities and colleges possibly being overlooked as business organizations, the laws of advertising still apply to them.

The Federal Trade Commission (FTC) filed a lawsuit on Wednesday against DeVry University for deceptive advertising. According to the lawsuit, the university misled consumers about the employment and earnings of its graduates in numerous radio, online, and print advertisements. DeVry University is one of the largest for-profit colleges in the United States and have claimed since 2008 that 90% of graduates seeking employment land jobs within six months of graduation. The FTC looked into this claim and realized the university counted numerous graduates as working in their field, when in fact they weren’t. For example, graduates of the business school were actually working as servers at a restaurant and engineers were mail carriers. In addition, DeVry claimed in their advertisements its graduates had 15% higher incomes one year after graduation than all other colleges and universities. No internal data showed meaningful evidence of this statement, leading the FTC to file the lawsuit.

How important is this case on DeVry? As a college student, I believe that the outcome will have a major impact on students and universities throughout the nation. When high school students are searching for colleges to attend and pursue careers, a main focus is placed on how graduates are succeeding in the field. Parents and students will undergo significant financial expense in order to improve employment opportunities; therefore, the truth of these numbers must be revealed prior to acceptance and enrollment. If these significant claims were made about a tangible product and the truth was revealed, consumers would think twice before purchasing it.  Currently there are no national standards for colleges to use in calculating employment statistics or information featuring post-graduate earnings on the revised College Scorecard (Washington Post). Why haven’t national standards for these essential facts been established? The risk level is higher when “purchasing” a university education; this is 4+ years of people’s lives, not simply buying a laundry detergent that claims to get all your stains out. So why hasn’t the government paid more attention to university advertising?

According to the Washington Post, the Department of Education is requiring DeVry to pull its advertisements containing these claims under investigation, as well as notify students of the university’s inability to validate the statements. In addition, DeVry students who feel they were deceived have the right to file a borrower defense to repayment claim to have their federal student loans dismissed. If these measures are not taken, the university will lose access to the federal financial aid programs (WashingtonPost). Is this enough action being taken though? Yes DeVry is being punished and students receive some of their expenses; however, I don’t know if this is enough to stop future universities from making deceptive advertisements. DeVry University ran these ads for nearly 8 years before they were speculated, during that time the university made a large amount of money, which was partially put into more advertising efforts. Students of the university still spent their time and effort learning, which may or may not pay off as much as they believed it would. The FTC first has to put national standards into place in regard to calculating graduate employment and salaries. Once standards are established, the government then will be able to investigate university graduate success claims and protect consumers.