DeVry University Hit With Lawsuit
In the last 10 years, student loan debt has nearly tripled, rising to an astonishing $1.2 trillion. A high percentage of this debit is owed by students at for-profit universities such as DevRy University, which is a division of the DeVry Education Group that owns multiple other organizations such as Ross University, American University of the Caribbean, Carrington College, and the Chamberlain College of Nursing. According to a 2012 report by the United States Senate Health, Education, Labor and Pensions committee 22 percent of students at for-profit schools will default on a loan payment within the first three years, as compared with about 9 percent of students at a nonprofit college.
For-profit institutions such as DeVry operate as a business, with shareholders and a corporate organizational structure, that sell education as a product. With profit being the major incentive, DeVry must find ways to attract students to enroll, spending large amounts of their total revenue on sales and marketing. DeVry is in fact one of the largest advertisers on google. Acceptance rates are high and tuition is about twice the cost as that of non-profit institutions, with only about 31.5 percent of students graduating versus 57 percent of students at non-profit institutions.
Many students that attend for-profit institutions such as DeVry get training, but no jobs. Many debt holders have accumulated loans they cannot ever afford to pay back. Because DeVry is publicly traded, the pressure is on for them to make a profit to make their shareholders happy. Another reason tuition is so costly is the salary for the leaders in the company. DeVry University President Daniel Hamburger earned $6.4 million in 2012. In contrast, the president at Harvard university earned about $900,000 – and she is one of only four presidents at public universities to earn such a high salary.
The disproportionate enrollment of minority students means that individuals that are already poor and underpaid are creating profits for these companies and their leaders. Meanwhile, students who enroll in these for-profit institutions and do not graduate (the majority don’t) have nothing to show for their education but more debt.
Within the past year, DeVry University has been under investigation by the Attorney General in both Illinois and Massachusetts. They’ve been named in numerous lawsuits in California, and they’ve been heavily regulated by the presidential education administration. One lawsuit claimed the campus leadership would bribe admissions counselors who exceed enrollment quotas, which in turn would lead to instances of “over-promising and under-delivering” to current and potential students.
Administrative studies revealed that in 2008, of the 64,722 students enrolled at DeVry University, 52.2% (or 33,795) withdrew by mid-2010. This same review also revealed that DeVry spent $2,989 on instruction per student in 2009, comparable to $4,054 per marketing a student. In 2010, 80.9% of DeVry University’s total revenue was comprised of federal education funds. In 2011 the university itself received a net income of $330 million dollars total.
Former testimonies of students who did not graduate with a degree from DeVry University have revealed a number of similar internal characteristics. Difficulty when trying to contact personnel regarding financial aid assistance, and neglect regarding assistance in academic advising were a common complaint among these students. Most complaints with DeVry University from students who withdrew, seemed to be the general feeling of misleading educational opportunities within the university. If you feel you were a victim of these predatory lending practices, give us a call at (800) 940-8911.
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Student Loan Services matches thousands of graduates with federal programs that are offered by The Department of Education to consolidate and lower their current Federal student loans. We help you take advantage of the latest regulations put in place by Congress and President Obama and potentially save thousands of dollars. Debt is hard to ignore. When you’re staring down a ballooning credit card balance and fending off insistent phone calls from angry creditors, it can be an all-consuming enemy. Give us a call today at (800) 940-8911 and see what we can do for you!
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