Dive Brief:

• The Federal Trade Commission has filed a lawsuit against DeVry University, arguing the for-profit institution misled students about their job prospects following degree completion.
• The U.S. Department of Education followed up on the FTC complaint with a list of conditions DeVry will have to meet to continue receiving federal financial aid, which include ceasing to make statements about students’ post-graduation employment outcomes without student-specific information that substantiates the claims and hiring an independent auditor to verify any future claims before they are published.
• CNBC reports DeVry plans to “vigorously contest” the FTC complaint, which it says is based on anecdotal examples that do not prove their claims, and request a hearing over the Department of Education’s actions.

Dive Insight:

DeVry University, operated by DeVry Education Group, is the latest target in a string of actions against for-profit higher education institutions. A common refrain is that they oversell the quality of their education to prospective students, promising employment outcomes that do not materialize.

The Education Department under President Barack Obama has been particularly aggressive in holding for-profits accountable, as have a number of states attorneys general, including Kamala Harris in California. Obama’s gainful employment rule is sure to affect for-profit colleges, a portion of which are expected to struggle to meet new requirements about graduates’ job placement rates to continue qualifying for federal financial aid, especially since Congress approved the funds to enforce it. But some expect the latest shrinkage across the industry as a course correction, rather than a downfall. Time, of course, will tell.