CHICAGO (CN) – Despite DeVry University’s $49 million settlement with the Federal Trade Commission over false advertising, a federal judge ruled Monday that DeVry graduates cannot sue the for-profit college for falsely claiming 90 percent of its graduates found a job in their chosen field six months after graduation.
Last year, private for-profit college DeVry University mailed 173,000 refund checks worth more than $49 million to former students as part of a settlement with the FTC over its deceptive advertisements.
The FTC accused DeVry of lying about its graduates’ employment records and post-graduation income to lure students into enrolling.
Specifically, the FTC said DeVry falsely claimed, “As a result of obtaining a DVU degree, for at least the last 30 years, 90 percent of DVU graduates who were actively seeking employment landed or obtained new jobs in their field of study within six months of graduation,” and that 90 percent of DeVry graduates from a specific year obtained the same results.
The school also falsely told potential students that the average earnings of DeVry graduates were 15 percent higher than the average earnings for graduates from other colleges, according to the FTC.
Thirty-nine DeVry graduates filed a class action against DeVry based on the same allegations of misconduct, claiming they relied on the 90 percent post-graduation employment statistics when deciding to enroll but were unable to find a job in their field of study within six months of graduation.
But U.S. District Judge Manish Shah dismissed the students’ lawsuit Monday because they cannot show their damages are measureable.
“Based on the allegations, it would seem that the difference between the true value and the inflated value can only be based on speculative post-graduate career prospects and earning potential,” Shah wrote in a 15-page opinion.
The students do not claim they were promised a certain employment outcome or that they considered enrolling in another school with better post-graduation employment rates, the judge stated.
“A consumer-fraud complaint need not allege a precise damages amount or a fully-developed mathematical model for calculating damages. But it needs to allege facts sufficient to show that plaintiffs suffered actual, measurable, non-speculative damages. The complaint here falls short,” Shah said.
DeVry operates more than 50 campuses, plus online classes, and enrolled 29,000 to 49,000 new students each year from 2008 to 2014. It charged $609 per credit hour for the first seven credit hours, then $365 for each credit hour after that.
A full-time student seeking a five-term associate degree during these years paid $39,585 in tuition and a full-time student in the eight-term business administration program paid total tuition of $75,516. Most DeVry students, however, attend part time and pay a higher overall cost.
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