The 8 Biggest DeVry University Lawsuits in History


DeVry University is a private for-profit university named after its 1931-founder Herman A. DeVry. Its academic excellence is based on its technology programs, which include technology engineering, software information systems, and Information Technology. The University has multiple campuses in 18 states and offers an online course. Despite its accreditation by the Higher Learning Commission, the University has been a point of focus by different parties regarding its student loan programs. This has been the leading cause of investigations facing the institutions and their subsequent lawsuits. This article will discuss the eight biggest cases in the University’s history.

What Are Some Significant Investigations Against DeVry University and Their Impact on Its Lawsuits?

A clear picture you will come across is that before any heavy lawsuit against DeVry University, there is always a critical investigation preceding it. In addition, the investigation is mainly focused on its student loan schemes. Grant Mitchell, Leader of the opposition (Alberta Liberal Party), was the first person to create attention to the University’s schemes. In March 1995, he tabled a motion to the Alberta Legislative Assembly alleging that its President had a very close relationship with a member of the Advisory council on postsecondary education, which amounted to a conflict of interest. In both 2007 and 2013-2014, the states of New York, Illinois, and Missouri investigated the accuracy of the information the University was using to persuade students. According to the Veterans Education Success, the significant investigations run from 2010 up to date.

In 2012, a Senate report revealed that the University was aggressively recruiting students against the best business principles expected. In 2013, a former DeVry military recruiter testified before the U.S Senate Committee on Defense Appropriations that the University was also using high-pressure tactics in recruiting military students. The culmination of these investigations was revelations by the Fair Trade Commission in 2016 that the institution had been using manipulated information to convince potential clients of the employability of its students. This was the game changer, for it gave birth to more than five lawsuits discussed in this article.

8. Vinod Chhabra Versus DeVry University &Three Others, Employer-Employee Roles in Civil Proceedings

The question of determination, in this case, was: can one sue an employer and her employees when raising retaliation, employment, and wrongful termination claims? The plaintiff went to court seeking legal action against the University and its three employees, Scott Sand, Kelli Spence, and Brian Porter. The plaintiff was an employee of DeVry University and worked as an admissions advisor, whereas the three were the University’s supervisors. Vinod went to court alleging that the three supervisors discriminated against him and unlawfully terminated him based on the disclosures he had made regarding the misconduct of Scott Sand. The three supervisors moved a motion in the same court arguing that under the differential of legal liabilities, they could not be sure together with their employer.

In response, the plaintiff argued that the respondents were to be held responsible for they were the ones who had penetrated the illegalities. In his ruling, Judge Dean D. Pregerson of the U.S District Court of California observed that the plaintiff could not initiate legal proceedings against the three supervisors alongside their employer. In his order, the Judge also observed that even if the plaintiff would amend the case, the chances he would win were narrow.

7. Castro Versus DeVry University, A Win Over Claims of Unfair Dismissal of its Employees

On May 13, 2015, a U.S Court of Appeals, Seventh Circuit, upheld a decision in which the University’s former employees accused it of unfair dismissal. However, the court overturned the court decision on one of the employees, Florez. According to FindLaw, the three employees, Elizabeth Castro, LaTonya Brooks, and Michael Florez, sued the University in a District Court, alleging that the institution unfairly dismissed them for raising complaints over their supervisor who was using racially and ethnically derogatory remarks against them. When they made the complaints, the supervisor was subsequently transferred after three months, a position the University admitted in court.

However, the University also argued that the supervisor was not directly involved in their termination decisions. Castro was terminated thirty months after complaining about poor performance, and the institution terminated Brooks due to dishonesty and inconsistent performance fifteen months later. The court agreed with the lower court’s decision regarding the two. For the case of Florez, who was terminated ten months after the complaint over inconsistent performance, the University could not justify why it had her terminated, and they ordered a retrial on her matter.

6. Saro Daghlian & Others Versus DeVry University & Others, A Win Over Accusations of Giving Wrong Information to Students

Though he might have lost in both original and appeal suits, Saro Daghlian remains one of the students to have mounted a spirited fight against the University. Initially, he sued the University in December 2005 in a punitive class lawsuit for failing to inform its IT students that academic units undertaken under it were not transferable to other institutions. According to him, this amounted to violating the California Education Code, California Consumer rights, and false advertising. It conducted itself in an unlawful, unfair, and deceptive manner in contravention of relevant business codes in California.

DeVry moved a motion to quash the complaint by the plaintiffs after they amended their original case. Dismissing the matter, Judge Morrow of the District Court of California based his decision on the idea that the defendants were a fully accredited institution not to offer loans but also the courses the plaintiffs were undertaking. On June 12, 2007, Daghlian reintroduced the case before the same Judge seeking to have the matter heard afresh. However, the Judge agreed with DeVry that the re-introduction was an abuse of the court process, and the matter was dismissed. Even though he lost in the two cases, Daghlian played a considerable role in motivating other students to take legal action against the institution. This was seen in the subsequent litigations.

5. A.G Schneiderman (For New York) Versus DeVry University, Publishing of Misleading Information ($2.75 million)

New York’s Attorney General has been vocal in holding DeVry accountable to its constituent. Between 2013-2014, the attorneys of Illusions and Missouri investigated the institution for deceptively advertising graduate earnings and running illegal compensation incentive schemes. This is not the first time these three states collaboratively targeted DeVry University (See New York, Illions & Missouri Versus DeVry & Others, Participation in Questionable Student Loan Practices).

The Office of the Attorney General, NY announced that after a successful pursuit against the institution, it had committed to settling the matter by paying a restitution fee to the affected New York students of $2.25 million and an extra $500,000 in penalties, costs, and fees. The institution is based in Illinois; the New York Attorney general argued that he had a legal duty to pursue the rights of its students from the revelations made in Free Trade Commission Versus DeVry University, Giving Wrong Information About Its Graduates’ Employment Rates.

4. Dave McCormick & Others Versus DeVry University, Manipulation of Employment Statistics and Salary Outcomes ($44.95 million)

This case stems from the Free Trade Commission Versus DeVry University, Giving Wrong Information About Its Graduates’ Employment Rates (see in a separate part of this article), where individual students filed a class lawsuit against the University on the same grounds which the Fair Trade Commission had advanced. They advanced the case because if they had known the statistics the University had presented to them during its marketing, they would not have enrolled in its programs.

After a vigorous exchange of informal and formal discovery related to the case, the two sides agreed to mediation in early 2019. Still, it yielded no results, and they returned to court. In December of the same year, they agreed to a second mediation under the recommendations of Judge Phillips. In early 2020, an announcement was made that they had reached an agreement of $44.95 million. Notably, the University maintained its grounds that it was not liable for any wrongdoing. The case exemplifies how litigants take advantage of one case to pursue with others.

3. Department of Education Versus DeVry University ($68.4 million)

Sometimes, the American Legal system targets law-breaking institutions like a violent web. The moment you put yourself up there as a target, be assured that you will not get one bullet but several of them, and this is what happened with DeVry University in 2016. After the infamous Free Trade Commission Versus DeVry University, Giving Wrong Information About Its Graduates’ Employment Rates ruling, the Department of Education went for its share on the same grounds. In 2016, both parties settled the matter by the University depositing a letter of credit valued at $68.4 million, and DeVry was expected to cease publishing the misrepresentations it had engaged in since 1975; it would not use such misrepresentations to convince any other institution or students and that it was to report to the plaintiff a demonstration of the steps it had undertaken to settle the complaints raised thereof.

2. Free Trade Commission Versus DeVry University, Giving Wrong Information About Its Graduates’ Employment Rates ($100 million)

In December 2016, DeVry University agreed to make a $100 million settlement with the Free Trade Commission (FTC) in a case where the latter had accused it of giving misleading information to the public regarding the employment rates of its graduates. According to the FTC, the University had deceptively claimed that more than 90% of its graduating students were able to secure jobs within the first six months after graduation. In addition, it claimed that within one year, its graduates earned 15% more than other grads from other colleges and universities. Other than the money, the University was required to directly inform consumers who were going to receive debt forgiveness, release academic results which had been withheld from students citing outstanding debts, and set a telephone hotline that was to be used by consumers to question anything about debt forgiveness, credit reports and collection concerns.

1. New York, Illions & Missouri Versus DeVry & Others, Participation in Questionable Student Loan Practices ($115 million)

It seems like DeVry has an appetite for engaging in fraudulent student-loan activities. In April 2007, three states, New York, Illinois, and Missouri, agreed to settle a case in which the University had been sued alongside Career Education Corporation and Washington University in St. Louis for engaging in questionable student loans. In fear of the possible high amounts the courts would award, and without admitting liability, DeVry University agreed, on its part, to refund $115 million from its revenue sharing to the affected students. Keep this case in mind; it will help us evaluate states’ role in holding student-loaning institutions accountable.

Apart from the two cases brought by former employees, DeVry seems to have managed to contain its internal conflicts and ensured that they do not overflow into court confrontations. However, the real threat is from the external forces-students (individually and in class lawsuits), states, and government agencies. In addition, it is also good to note that the University has never won any case against government agencies, nor has it ever agreed to go to full trial with them.

In Conclusion

Student loans are one of the critical issues that emerge in every presidential election in the U.S. Different political candidates have given various approaches to solving student debt issues. Despite their differences, there is a common ground: it is immoral and illegal for any institution to manipulate students into taking loans. DeVry University is one of those institutions. The brush-off investigations by the Senate are not enough.

The youth expect that their political class will make strict laws that hold these institutions accountable. States and government agencies must leave no stone unturned. Consumer protection agencies must also help the students by investigating and filing suits against DeVry University, and any other institution found to have committed such offenses. Media scrutiny must be encouraged, and all relevant parties must clear students’ voices. All in all, student loans have played a massive role in supporting students in the U.S.

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