Founded in 1931 by Herman A. DeVry, the inventor of the first portable motion picture projector and early government training film producer, DeVry Education Group (“DeVry”) began as DeForest Training School. Having been renamed “DeVry Technical Institute” in 1953 and gained accreditation to confer associate degrees in electronics in 1957, DeVry became the first for-profit school to be accredited by the North Central Association of Colleges and Schools in 1977. It received full accreditation in 1981 and completed its initial public offering in June 1991. By May 2014, it distinguished itself as one of America’s largest for-profit college chains, with approximately sixty locations across twenty-five states. Today, DeVry University is but one subsidiary of Adtalem Global Education.
Like its cohorts, DeVry has weathered much controversy for over twenty years. In 1995, DeVry was suspended from Ontario’s student loan program after a large number of its students misreported their income. In April 2007, New York settled with three schools, including DeVry, that purportedly participated in questionable student loan practices. The United States Department of Justice accused DeVry of providing it with false claims and statements about recruitment pay and performance in 2008. For its part, the Veterans Affairs Department reprimanded DeVry largely over allegations of deceptive marketing made by the Federal Trade Commission on March 14, 2016. In fact, on December 15, 2016, the FTC settled a $100 million suit against DeVry, which alleged that DeVry’s advertisements deceived consumers about the likelihood that students would find jobs in their fields of study, and would earn more than those graduating with bachelor’s degrees from other colleges or universities. Meanwhile, the attorneys general of Illinois and Massachusetts commenced their own investigations. In May 2017, the Higher Learning Commission designated DeVry as being “under governmental investigation” as a result of the Massachusetts AG’s probe – a designation removed as a result of a settlement in September 2017.
As part of the Obama Administration’s aggressive regulation of the for-profit college sector, the United States Department of Education (“DOE”) created the Student Aid Enforcement Unit (“the Unit”) to respond more quickly and efficiently to allegations of illegal actions by higher education institutions in February 2016. As envisioned, this entity was expected to undertake the following tasks: (1) identifying potential misconduct or high-risk activity among higher education institutions and protect federal funding; (2) providing legal analysis, support, and advice concerning claims of borrowers of Direct Loans; (3) imposing administrative actions such as Emergency, Termination, Limitation, Suspension, or Fine actions; and (4) ensuring institutions’ compliance with requirements regarding the disclosure of campus crime statistics and security information. Tellingly, in the very press release announcing this office’s creation, the DOE referenced its enforcement actions against such operators as Marinello Schools of Beauty, Computer Systems Institute, and DeVry.
A Reported Change?
According to an explosive report in the New York Times, the Unit’s tune and tenor changed once Betsy DeVos, President Donald J. Trump’s Secretary of Education, selected Julian Schmoke, a former DeVry official, to head the Unit. With impressive rapidity, the Unit was downscaled from dozens of lawyers and investigators into a three-person operation. Its sharply reduced staff soon cancelled investigations into two major for-profit operations – Bridgepoint Education and Career Education Corporation – not to mention DeVry. Seemingly, the Unit’s trio of workers now mostly focus on processing student loan forgiveness applications and evaluating smaller compliance cases.
Elizabeth Hill, a spokeswoman for the DOE, attributed the reduction of the group to attrition. She further added that “conducting investigations is but one way the investigations team contributes to the department’s broad effort to provide oversight.” Lastly, she pointed out that none of the employees hired by DeVos who had previously worked in the for-profit education industry had influenced the Unit’s work.