The U.S. Federal Trade Commission filed a lawsuit against DeVry University, run by DeVry Education Group Inc, on Wednesday alleging the company deceived students about the prospect that they would find work.
Share of DeVry were down 17.43 percent at $19.60 following the announcement of the FTC lawsuit around midday on Wednesday. The U.S. Department of Education, which has been cracking down on for-profit schools, said on Wednesday it had ordered DeVry to stop making certain claims about its graduates' employment.
In a letter to the school posted on the Education Department web site, it said that as condition of further U.S. federal student aid to DeVry students, the university must substantiate assertions it makes about its students finding work.
DeVry said in a statement that it would "vigorously contest" the FTC complaint, and would request a hearing to discuss the Education Department action. "DeVry Group believes that the FTC’s complaint – filed 40 years after DeVry University began publishing accurate graduate employment statistics – is without a valid legal basis," the company said in a statement.
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"In addition, the FTC’s complaint contains anecdotal examples that exaggerate the allegations but do not prove them," the company said. The FTC accused the school of being deceptive in saying that 90 percent of DeVry graduates found work in their field within six months of graduation.
The FTC said that it found that DeVry would define a student as working in their field when they were, in fact, working as a server in a restaurant. In another instance, a person who graduated in 2012 with a degree in business administration with a health care management focus was listed as working in his field when he was selling cars.
"Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn," said FTC Chairwoman Edith Ramirez.