DeVry to Limit Revenue From Federal Funding

DeVry Education Group Inc. on Tuesday said it would voluntarily edge down the share of money it gets from federal funding, as it looks to limit its exposure amid a government crackdown on for-profit colleges.

The parent of DeVry University and others said it would limit the revenue that each of its six Title IV institutions derive from federal student aid to 85%, including Department of Veterans Affairs and military tuition assistance benefits. Federal regulations allow for 90%, excluding military assistance.

Chief Executive Lisa Wardell said the move "underscores our commitment to finding solutions to the issues facing higher education today."

The move would diversify DeVry's revenue streams as the federal government has clamped down on the for-profit education industry in recent years.

Earlier this month, ITT Technical Institute, among the nation's largest for-profit college chains by revenue, abruptly closed more than 130 campuses, forcing more than 40,000 students at campuses in 38 states to begin looking for another school after the government banned it from enrolling new students receiving federal aid. That move follows last summer's liquidation of Corinthian Colleges Inc.

The government has also cracked down on for-profit schools' aggressive recruiting practices and has enacted stricter policies intended to ensure that schools are preparing students for gainful employment. The for-profit college industry has shriveled in recent years, with enrollments at the largest chains plummeting by more than half in the past five years.

The Federal Trade Commission in January took aim at DeVry, saying it allegedly ran false television and online advertisements about the employment success and earnings of its graduates.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

September 20, 2016 08:35 ET (12:35 GMT)

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