May 24--DeVry Education Group's CEO is out, two months after DeVry University was suspended from the Department of Veterans Affairs' Principles of Excellence program and four months after the Federal Trade Commission filed suit against DeVry, accusing the for-profit college of misleading students about job placement success.
Daniel Hamburger -- who was paid $5.3 million last year to lead the Downers Grove-based company -- has been replaced by Lisa Wardell, a longtime DeVry board member with a background in private equity.
Hamburger left "to pursue other opportunities," according to a news release from DeVry, which did not make Wardell available for an interview. School spokesman Ernie Gibble said in an email Tuesday that "Daniel's departure has nothing to do with the FTC."
DeVry's stock has lost 56 percent of its value since the start of 2015, as it and other for-profit colleges have come under increased federal scrutiny.
A lawsuit filed by the FTC in January alleged DeVry made deceptive claims when it boasted in television and Internet ads that 90 percent of students actively seeking employment landed jobs in their field within six months of graduation. DeVry included in that number a business degree graduate working as a server at a Cheesecake Factory restaurant and a technical management graduate who took a job as a rural mail carrier, the FTC alleged. DeVry also falsely claimed that its graduates made 15 percent more than "all other bachelor's degree candidates," the FTC alleged.
Then, in March, the VA suspended DeVry from a list of 6,000 schools that voluntarily agreed to standards including the end of "fraudulent and aggressive recruiting techniques and misrepresentations."
DeVry is contesting the suit, which it said in March is "without merit."
The FTC says 30,000 to 50,000 students were misled by DeVry's claims. A 2012 U.S. Senate committee report found that the school, which gets 80 percent of its funding from the federal government and aggressively recruits students from the military, spends more on marketing and student recruitment than it does on instruction.
Over half the students who enrolled in the 2008-2009 school year dropped out by the middle of 2010, the report found. The high prices the school charges mean many students leave with no degree but with a heavy debt burden, the report said.
Wardell, who was most recently executive vice president and chief operating officer of diversified holding company RLJ Cos., will lead DeVry's attempts to diversify globally. DeVry Education Group already runs a medical school in the Caribbean and a university in Brazil.
kjanssen@tribpub.com
