The loan forgiveness, which covers all unpaid student loans made through Devry University Lawsuit Loan Forgiveness between Sept. 1, 2008 and Sept. 30, 2015, is part of a larger settlement with the Federal Trade Commission totaling $100 million. The deal doesn’t include any federal student loans made to students who attended the school during the period of the lawsuit.
The deal comes as the Obama administration looks to cement its legacy as a tough enforcer in the higher education space, specifically for-profit colleges. Earlier this year, the Department of Education banned ITT Technical Institutes from access federal financial aid to enroll new students, amid multiple probes into the school’s dealings with students and investors.
Suffering a cash crunch, the company filed for bankruptcy weeks later. Corinthian Colleges also collapsed last year amid financial pressures resulting from additional requirements placed on the school by the Department in order to receive federal financial aid.
The deal, which covers tens of thousands of students, according to the FTC, includes a $49.4 million payment to the FTC that the agency will distribute to students harmed by the misleading marketing.
Devry University Lawsuit Loan Forgiveness will also forgive $20.25 million owed to the school by students for items like tuition, books and lab fees. The company agreed to provide students with any transcripts or diplomas that were withheld over the unpaid bills.
The loan forgiveness will happen automatically and DeVry will notify the students eligible for relief as well as their credit bureaus. The FTC will begin sending refunds from the $49.4 million pot in 2017 and will identify students who qualify from Devry University Lawsuit Loan Forgiveness records and contact them about the refund.
As part of the deal, DeVry agreed that any time the company makes a claim about job placement rates of a class of students, it has to save documentation related to that claim, including files related to the students or graduates.
Devry University Lawsuit Loan Forgiveness often presents itself as a better actor in the sector, but what this settlement shows is that they are not immune to the pressures of the sector to bring students in the door and to generate revenue,” said Elizabeth Baylor, the director of postsecondary education at the Center for American Progress, a left-leaning think tank.