July 22, 2019

July 22, 2019

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U.S. Government Reminds Colleges and Universities to be Prepared to Defend Advertised Statistics

The Federal Trade Commission (“FTC”) and U.S. Department of Education (“ED”) recently reminded all colleges and universities to review their online and print materials not only for the accuracy of any employment statistics listed, but to ensure they have the evidence to substantiate any published statistics. 

Specifically, the FTC sued DeVry, a regionally accredited for-profit university, and ED imposed immediate sanctions, in large part because the university was unable to substantiate its graduate employment and salary claims. DeVry, had for several years highlighted in its admissions materials, on its website and in other advertising that 90% of its graduates obtained employment in their field of study. For example: "[s]ince 1975, 90.1% of DeVry graduates system-wide in the active job market held positions in their fields of study within 6 months of graduation." 

As ED noted in its letter to DeVry: "When an institution chooses to use job placement rates as a means of attracting students to enroll, the institution must be able to provide ‘the most recent available data concerning employment statistics and … any other information necessary to substantiate the truth of the advertisements’." 20 U.S.C. § 1094(a)(8); 34 C.F.R. §668.14(b)(10) (emphasis added). The FTC lawsuit challenges, among other things, the methodology DeVry used to count graduates as employed. It questions reasons DeVry excluded students from the calculation and certain categories of graduates DeVry reported as employed. The lawsuit also challenges DeVry’s claim that its graduates with bachelor’s degrees earned 15% more than graduates with bachelor’s degrees from all other colleges and universities. 

Regardless of the reason that a school publishes employment outcomes, it is “advertising” its graduate employment and must stand ready to substantiate any statistics presented. Compliance issues that colleges need to address, include: 

The accuracy of the statistics published; 
Use of a consistent methodology (a change in methodologies could mean statistics may not be comparable from year to year); 
Disclosure of the school’s methodology and in particular what graduates may have been excluded from the calculation; and 
Maintenance of backup documentation necessary to substantiate the statistics published. 

The DeVry situation is another reminder to all schools (not just for-profit colleges) that they must use an appropriate methodology to determine published graduate employment rates and have substantiation of those statistics. Students increasingly have turned to litigation as a means to avoid repayment of student debt. Law schools recently faced a rash of such lawsuits, some of which remain pending. All schools need to exercise care with respect to the representations they make regarding employment of their graduates. 

Conducting a self-audit or having an independent third party perform the audit of your school’s employment statistics can help ensure compliance. 

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About this Author

Bradley M. Bakker, Employment, Labor, Attorney, Armstrong Teasdale, Law Firm
Associate

Bradley Bakker is an experienced employment and labor litigator whose clients include public and private companies as well as educational institutions. He defends employers in state and federal courts and before the Equal Employment Opportunity Commission and other administrative bodies.

314-342-8069
Henry Baskerville, Litigator, Trial Attorney, White Collar Criminal, Higher Education, Armstrong Teasdale Law Firm
Of Counsel

Henry Baskerville, of counsel to the Litigation practice group, is an experienced trial attorney who focuses on white collar criminal, complex commercial cases, and higher education. 

In the white collar area, Henry handles both the defense at trial and appeal of bank, mail, securities and tax fraud matters, as well as public corruption charges. 

As part of his practice, Henry conducts internal investigations of entities and institutions concerned about potential violations of the law or those that are already facing government probes. When a wrongdoing is detected, Henry examines the nature and extent of the issue. He conducts employee interviews, reviews business records and consults with management to determine the best strategy. He also assists businesses in setting up compliance programs that provide policies and procedures aimed at eliminating potentially unlawful conduct.

 

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Jovita M. Foster, Armstrong Teasdale Law Firm, Labor Law Attorney
Partner

Jovita Foster is an accomplished litigator working with small- to medium-sized businesses, public utilities, and Fortune 100 and 500 companies in all facets of employment and labor law.

In state and federal jurisdictions and in front of the Appeals Tribunal, Jovita defends employers and managers in disputes involving claims of discrimination, retaliation, violations of public policy, sexual harassment, wrongful termination, and unemployment appeals. She successfully defends employers and managers in arbitration. Jovita also represents broker-dealers in...

314-552-6698
Bill Ojile, Litigator, Armstrong Teasdale Law Firm

Bill Ojile, a member of the Litigation practice group, has over 25 years of experience advising, counseling and litigating on behalf of companies, often in highly regulated environments, helping them to resolve difficult legal and policy issues. 

He has managed significant disputes both as in-house and outside counsel. These disputes have required Bill to oversee large teams of people managing legal, administrative, public relations and legislative issues, as well as formulating strategic direction, often simultaneously. For example, as General Counsel of Westwood College he managed...

303.575.4000