CHICAGO — DeVry University has filed a lawsuit against the U.S. Department of Education that seeks to block an order that the Naperville-based for-profit college chain pay more than $23 million to recoup the cost of student loans taken out by more than 600 borrowers.
DeVry filed its motion for injunctive relief last week in federal court in Chicago. The university alleges that the Department of Education exceeded its authority when it announced earlier this year the approval of about 1,800 “Borrower Defense” claims submitted by former DeVry students, totaling more than $71 million.
DeVry contends that the department “lacks the authority to prosecute the Recoupment Action; has exceeded its statutory mandate and violated dispositive procedures in adjudicating the underlying borrower defense claims en masse; and has violated DeVry’s due process rights by failing to provide DeVry with adequate notice or a meaningful opportunity to contest the discharged sums.”
The first hearing in the lawsuit is scheduled for December, according to federal court records.
The order that DeVry cover more than $23 million came after the Department of Education found that the university misled borrowers about the rate at which DeVry students were hired upon graduation. The department noted that “these are the first approved borrower defense claims associated with a currently operating institution.”
“The Department found that from 2008 to 2015 DeVry repeatedly misled prospective students across the country with claims that 90 percent of DeVry graduates who actively seek employment obtained jobs in their field of study within six months of graduation,” the department said in a statement issued last February. “In fact, the institution’s actual job placement rate was around 58 percent. The Department found that more than half of the jobs included in the claimed 90 percent placement rate were held by students who obtained them well before graduating from DeVry and often before they even enrolled.”
In 2016, DeVry and the Federal Trade Commission agreed on a $100 million settlement after the FTC brought a lawsuit against the university that also alleged misleading job placement rates for graduates.
In a statement issued earlier this month, DeVry maintained that it never misled borrowers.
“Our position has always been that any allegation or conclusion that DeVry misled students at any time is wrong, and we strongly believe the Department has mischaracterized DeVry’s calculations and disclosure of graduate outcomes from past advertising,” the university said in a statement. “It is worth emphasizing that these student claims date back to advertising that was used between 2008 and 2015, predating DeVry’s establishment as an independent institution with a new Board and leadership.”