DeVry University has agreed to pay $100 million to settle a U.S. Federal Trade Commission lawsuit accusing the for-profit school of misleading potential students with ads promoting job and salary success for graduates, the agency said on Thursday.
DeVry, offering courses online and at various locations around the country, is one of a series of for-profit schools that have been scrutinized by federal officials over deceptive ads.
Under the settlement, DeVry will forgive $50.6 million in debt owed by students for tuition and fees as well as pay $49.4 million to students harmed by the deceptive ads, the FTC said.
DeVry had been accused of falsely claiming that 90 percent of graduates found jobs in their field within six months of graduating and that they on average earned 15 percent more a year after graduating with a bachelor's degree than similar graduates of other schools.
DeVry, run by parent company DeVry Education Group Inc, did not acknowledge any wrongdoing in the settlement and said it was pleased the agreement had been reached.
DeVry's share price was up 3.4 percent on Thursday, trading at $31.90.
The entire for-profit school sector has struggled since a 2010 U.S. government crackdown prompted by high student debt loads and default rates and low graduation rates.
ITT Educational Services imploded this year after the government banned it from enrolling students who receive federal aid. Corinthian Colleges abruptly closed last year amid federal and state investigations.
The settlement also requires DeVry to take steps to ensure that its advertising is accurate regarding the likelihood that its graduates would find work related to their schooling or future salaries, the FTC said.
DeVry has locations in Arizona, California, Colorado, Florida, Georgia, Illinois, Indiana, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas and Virginia.
(Reporting by Diane Bartz; Editing by Will Dunham)