DeVry Education Group (NYSE:DV), the parent company of the for-profit university, has been trying to revamp its image after becoming the subject of several investigations into its recruitment practices. The company is now facing a federal lawsuit and heightened regulatory scrutiny from several government agencies. As the university has faced increased pressure, the value of its shares have fallen by more than half since the start of 2015, prompting a flurry of activity at the company.
The company recently announced the departure of its chief executive, Daniel Hamburger. Hamburger, who was paid $5.3 million last year, has a 13 year history with the company, including nine as chief executive. Hamburger led the company from primarily serving undergraduate and business school students in the United States into a global education provider. DeVry Education Group also runs a medical school in the Caribbean and a university in Brazil.
According to the board of DeVry, Hamburger left “to pursue other opportunities.” He is being replaced by with Lisa Wardell, a director on the DeVry board and the former chief operating officer at asset management firm RLJ Companies.
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 spends more on marketing and student recruitment than it does on instruction. The report also found that over half the students who enrolled in the 2008-2009 school year dropped out by the middle of 2010, leaving the students with no degree but with a heavy debt burden. DeVry has denied any wrongdoing.
The Department of Education threatened DeVry in January with the loss of access to the federal financial aid programs over the employment claims. The department wants DeVry to pull advertisements about post-graduation employment outcomes and notify students of its inability to substantiate the claims.
In March, DeVry was suspended from participation in the Department of Veterans Affairs Principles of Excellence program that identifies schools doing a good job of serving former troops. This action was also sparked by the FTC lawsuit. The agency is now conducting compliance reviews at all DeVry campuses.