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DeVry Education Settles Suit with FTC, Coughs Up $100M
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DeVry Education Group Inc. (DV - Free Report) has agreed to pay $100 million to settle legal charges leveled by the U.S. Federal Trade Commission (“FTC”).
In Jan 2016, the FTC held DeVry University responsible for misleading students through an advertisement which claimed that 90% of its graduates would be employed within their field of study within six months of graduating. The advertisement also claimed that its graduates earn 15% or more on an average every year when compared to graduates from other universities.
The Settlement
DeVry Education will pay $49.4 million in cash to the qualifying students, affected by the deceptive publicity. Also, $30.35 million will be provided in order to forgive all private unpaid student loans issued by DeVry Education between Sep 2008 and Sep 2015. The remaining $20.25 million will be used to pardon student debts for tuition, books and lab fees.
Under the settlement, DeVry Education will also have to ensure that its advertisements are true to the promises regarding job possibilities and expected salaries.
However, DeVry Education has neither admitted nor denied the claims but has said that it is pleased to have reached a settlement. It has also informed that student services and access to federal student loans will not be affected by the settlement.
Investors’ Reaction
Shares of DeVry Education jumped 2.9% on Dec 15, following the announcement. Also, the company’s shares gained over 40% in the last three months, outperforming 8.8% growth for the Zacks categorized Schools industry.
Estimates have gone slightly up for the current year. DeVry Education also has an impressive earnings history, having beaten estimates in all of the trailing four quarters.
Zacks Rank & Other Key Picks
DeVry Education carries a Zacks Rank #2 (Buy).
Other favorably ranked stocks in the school industry include TAL Education Group (TAL - Free Report) , Capella Education Company and Universal Technical Institute, Inc. (UTI - Free Report) .
TAL Education’s earnings are expected to rise 0.8% in fiscal 2017.
Universal Technical – a Zacks Rank #2 stock – is expected to see a 77.2% increase in fiscal 2017 earnings.
Capella, also a Zacks Rank #2 company, is expected to witness 8.9% growth in full-year 2016 earnings.
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Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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DeVry Education Settles Suit with FTC, Coughs Up $100M
DeVry Education Group Inc. (DV - Free Report) has agreed to pay $100 million to settle legal charges leveled by the U.S. Federal Trade Commission (“FTC”).
In Jan 2016, the FTC held DeVry University responsible for misleading students through an advertisement which claimed that 90% of its graduates would be employed within their field of study within six months of graduating. The advertisement also claimed that its graduates earn 15% or more on an average every year when compared to graduates from other universities.
The Settlement
DeVry Education will pay $49.4 million in cash to the qualifying students, affected by the deceptive publicity. Also, $30.35 million will be provided in order to forgive all private unpaid student loans issued by DeVry Education between Sep 2008 and Sep 2015. The remaining $20.25 million will be used to pardon student debts for tuition, books and lab fees.
Under the settlement, DeVry Education will also have to ensure that its advertisements are true to the promises regarding job possibilities and expected salaries.
However, DeVry Education has neither admitted nor denied the claims but has said that it is pleased to have reached a settlement. It has also informed that student services and access to federal student loans will not be affected by the settlement.
Investors’ Reaction
Shares of DeVry Education jumped 2.9% on Dec 15, following the announcement. Also, the company’s shares gained over 40% in the last three months, outperforming 8.8% growth for the Zacks categorized Schools industry.
Estimates have gone slightly up for the current year. DeVry Education also has an impressive earnings history, having beaten estimates in all of the trailing four quarters.
Zacks Rank & Other Key Picks
DeVry Education carries a Zacks Rank #2 (Buy).
Other favorably ranked stocks in the school industry include TAL Education Group (TAL - Free Report) , Capella Education Company and Universal Technical Institute, Inc. (UTI - Free Report) .
TAL Education sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TAL Education’s earnings are expected to rise 0.8% in fiscal 2017.
Universal Technical – a Zacks Rank #2 stock – is expected to see a 77.2% increase in fiscal 2017 earnings.
Capella, also a Zacks Rank #2 company, is expected to witness 8.9% growth in full-year 2016 earnings.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>