DeVry University Voluntarily Limits Federal Financial Aid
(Photo: Devry University)
DeVry Education Group has announced plans to voluntarily limit the amount of revenue it accepts from federal funding to 85% for each of its six Title IV institutions, including the Department of Veterans Affairs and military tuition assistance benefits.
For-profit higher education institutions are currently allowed to obtain 90% of their revenue through Title IV federal student aid. Federal regulations do not include VA or other military tuition assistance benefits in the 90%.
However, the new plan would reduce these calculations so that DeVry could only obtain 85% of their revenue from student aid, including VA and military benefits.
The DeVry Group stated plans to fully commit to these new calculations by the end of its fiscal year 2017. In addition, reports on the commitment will be publicly announced on an annual basis. The group continued to state it will fully commit to stay below this threshold in the future.
“This is a significant pledge that DeVry Group is voluntarily making for the long term and it underscores our commitment to finding solutions to the issues facing higher education today,” said Lisa Wardell, president and CEO of DeVry Education Group. “This is part of a broader effort to improve our policies and demonstrate the quality and value of our programs.”
Wardell went on to say that DeVry will be working with a number of stakeholders in order to fully commit. Wardell said these plans will be fully shared with the public as they are finalized.
While DeVry officials continue to insist that the move has nothing to do with the recent government scrutiny that for-profit higher education institutions have been under, the company has continually come up against federal regulators. The company is currently being sued by the Federal Trade Commission, who argues that the company has been falsifying information given to consumers concerning employment and earnings of its graduates in advertisements on radio and television, as well as online and print.
As a result of that lawsuit, a separate action was taken by the Department of Education requiring the company to remove their advertisements concerning employment outcomes. The department noted that if the school does not do so, it will lose its federal financial aid programs, writes Danielle Douglas-Gabriel for The Washington Post.
Although some, including Michael Tarken, a senior research analyst at Compass Point, do not believe the sincerity behind the company’s recent announcement, with Tarken calling it “a step to appease regulators while the company is in the midst of an ongoing investigation by the FTC,” the company insists that the move is just one of several reforms to come that the company hopes will help to create new standards for higher education.
DeVry also joined the University of Phoenix in May to remove the ban in place that did not allow students to file class-action lawsuits or take their grievances to court.
“Today’s announcement, while significant and a step in the right direction, remains a voluntary commitment,” Carper said. “Only Congress can enact permanent solutions to this problem. Only Congress can hold all for-profit colleges accountable by closing the 90/10 loophole.”
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