The Department of Education will cancel federal student loans for at least 1,800 students who attended DeVry University, once one of the nation’s largest for-profit college chains, because it was fraudulent. candidates for years with exaggerated claims about their career prospects.
While the department has ramped up debt relief for students who have been victims of their schools, the decision announced Wednesday is the agency’s first approval of fraud complaints related to A school is still in operation.
Officials said the statements passed Wednesday were just the beginning. They want other students to have attended DeVry during its false promises please help.
Between 2008 and 2015, department officials said, DeVry advertised that 90% of its graduates found employment in their field of study within six months. In fact, only 58% have done so. School officials knew about the discrepancy and ignored complaints from alumni, department officials said.
Until Wednesday, the department had only taken action against schools that had closed, including major chains like Corinthian Colleges and Corinthian Colleges. smaller ones like Marinello Beauty School.
“We thought it was really important to show that we are willing to take these actions against open schools and will hold accountable the current owners of open schools,” said James. Kvaal, Minister of Education, said at a press conference.
While noting that the statements occurred when DeVry was under different leadership, a school spokeswoman, Donna Shaults, said DeVry believes the Department of Education misinterpreted the school’s statements about graduation outcomes. student’s.
“We disagree with the conclusion they have reached,” she said.
Officials see Wednesday’s action as one of several moves to revive the Department of Education’s enforcement arm that has hiding in the Trump administration. Betsy DeVos, President Donald J. Trump’s secretary of education, repeatedly blocked investigations into for-profit schools and appointed Julian Schmoke – a former principal at DeVry – to lead the enforcement department of the school. organ.
For four years, Ms. DeVos’ agency failed to approve new grounds for claims from students who were scammed, and rejected 130,000 in the amount of rubber stamp refusal. Those disclaimers and other stalled claims, which have remained undecided for years, are now the subject of a class action involving about 200,000 borrowers.
The Education Department said in a court filing last month that it was close to settling that case and hoped to announce a settlement in April.
DeVry’s 1,800 ex-students have been approved for relief through a student cheating claim system, known as “”Borrower protection for debt repayment“There will be nearly $72 million in loans forgiven.
That means they won’t have to pay back the loans with taxpayers’ money. The department said it would pursue DeVry’s current owner, Cogswell Capital, for compensation.
Cogswell Capital is an investment firm run by Bradley Palmer, a venture capitalist and financier. Mr. Palmer, who was no work experience in higher education, bought DeVry in 2018 from Adtalem Global Education, which operates several for-profit schools. Adtalem used to call himself DeVry but changed his name in 2017 after a series of school-related scandals.
In 2016, DeVry agreed to pay 100 million dollars to resolve a Federal Trade Commission lawsuit over its misleading claims about graduates’ careers and earnings. A year later, DeVry addressed similar claims made by New York and Massachusetts.
A message left at Palm Ventures, which Mr. Palmer has described as a family office manager of his family’s estate, was not immediately returned. An Adtalem representative did not immediately respond to a message seeking comment.
The Ministry of Education said it also Borrower protection request approved from alumni at the nursing program of the ITT Institute of Technology, Minnesota Business School (also known as Globe University), and Westwood College. Including DeVry, the approvals announced Wednesday will wipe out $415 million of debt for 16,000 borrowers.
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