Adtalem Global Education Scandal: Legal Actions, Walden & DeVry Controversies, and Student Debt Relief

The Adtalem Global Education scandal involves federal regulatory actions, consumer protection lawsuits, and borrower defense claims surrounding false employment statistics and predatory practices. Originating from its legacy as DeVry Education Group, Adtalem faces ongoing government scrutiny and student debt recoupment demands tied to deceptive advertising, misleading program costs, and prolonged degree timelines.

The Evolution of Adtalem Global Education: Corporate History and Rebranding

Adtalem Global Education Inc. (NYSE: ATGE) is one of the largest higher education corporations in the United States. However, much of its current regulatory history stems from its previous corporate identity. Established originally as DeVry Inc. and later named DeVry Education Group, the parent company operated a wide network of for-profit colleges, including DeVry University, Keller Graduate School of Management, Carrington College, and Chamberlain University.

In May 2017, following a series of high-profile federal investigations, enforcement actions, and consumer protection lawsuits regarding misleading advertising claims, DeVry Education Group officially rebranded as Adtalem Global Education. Management framed the name change as a strategic shift toward global workforce solutions and healthcare education.

• DeVry Inc. / DeVry Education Group
  • 2017 Corporate Rebranding
    • Adtalem Global Education (NYSE: ATGE)
      • Spinoff: DeVry University (Transferred 2018)
      • Acquisition: Walden University (Acquired 2021)
      • Healthcare: Chamberlain University
      • Medical: Ross University & AUC

Despite the corporate name change, the company remained legally liable for regulatory enforcement actions initiated during its operation of DeVry University. In 2018, Adtalem completed the transfer of DeVry University and its Keller Graduate School of Management to Cogswell Education LLC for a nominal purchase price, structuring the deal with seller financing. However, federal authorities continued to hold Adtalem accountable for past institutional misrepresentations, establishing a precedent for corporate accountability in higher education.

Following the divestment of DeVry University, Adtalem shifted its focus heavily toward healthcare and online graduate education. In August 2021, Adtalem completed a $1.48 billion acquisition of Walden University from Laureate Education. This transaction significantly enlarged Adtalem's student footprint but simultaneously exposed the parent corporation to existing and emerging legal challenges related to Walden's doctoral and graduate degree programs.

The DeVry University FTC Settlement and Federal Recoupment Claims

The legal foundation of the Adtalem controversy began with enforcement actions directed at DeVry University. In January 2016, the Federal Trade Commission (FTC) filed a federal lawsuit against DeVry Education Group, alleging that the institution engaged in deceptive advertising across national television, radio, online, and print channels.

Deceptive Advertising Claims

The FTC lawsuit centered on two primary marketing claims used by DeVry to attract prospective students:

1. The 90% Employment Rate Claim: DeVry advertised that 90% of its graduates actively seeking employment obtained jobs in their field of study within six months of graduation.
2. The Higher Earnings Claim: DeVry claimed that one year after graduation, its bachelor’s degree graduates earned 15% more on average than graduates from all other colleges and universities.

Federal investigators found that these claims were factually unsupported and materially misleading. According to the FTC’s complaint, DeVry counted graduates as "employed in their field" even when they worked in positions that did not require a college degree or were completely unrelated to their course of study. Examples cited in federal filings included graduates working as mailroom clerks, restaurant staff, data entry clerks, or retail associates being categorized as working in specialized technical or business fields. Furthermore, the FTC established that DeVry counted individuals who continued working in jobs they had held prior to enrolling at the university as successful employment placements resulting from their degrees.

The $100 Million Settlement

In December 2016, DeVry Education Group agreed to a $100 million settlement with the FTC to resolve the deceptive advertising charges. The settlement terms mandated:

• $49.4 million in Cash Refunds: Administered by the FTC to distribute direct payments to qualifying students who were harmed by the misleading employment claims.
• $50.6 million in Debt Relief: Direct cancellation of outstanding institutional debt owed directly to DeVry for tuition, fees, and books for undergraduate students enrolled between 2008 and 2015.

Detailed historical records regarding this enforcement action are maintained on the official Federal Trade Commission DeVry Settlement Page.

• 2016 FTC Settlement Breakdown ($100 Million Total)
  • $49.4 Million: Direct Cash Refunds to Harmed Students
  • $50.6 Million: Cancellation of Outstanding Institutional Tuition Debt

U.S. Department of Education Recoupment Actions

The FTC settlement opened the door for federal student aid intervention. Under federal law, students who enroll in higher education institutions based on false or misleading claims may seek complete student loan discharge under the Borrower Defense to Repayment regulations set forth in 34 C.F.R. § 685.206 and 34 C.F.R. § 685.222.

In February 2022, the U.S. Department of Education approved initial borrower defense discharges totaling over $71 million for former DeVry students. Critically, the Department announced that it would formally seek recoupment from Adtalem Global Education to recover the cost of these discharged loans. The official announcement detailing these recoupment policies is documented by the U.S. Department of Education Press Office. This established an ongoing financial and legal obligation for Adtalem long after its operational separation from DeVry.

Walden University Class Action Lawsuit and Misrepresentation Allegations

Shortly after Adtalem acquired Walden University in August 2021, the institution became the subject of major federal litigation involving allegations of predatory pricing and misrepresentation.

Allegations of Prolonged Capstone and Dissertation Requirements

In December 2021, former doctoral students filed a collective class-action lawsuit against Walden University (Alabaster et al. v. Walden University). The suit alleged that Walden engaged in a fraudulent "bait-and-switch" scheme regarding the duration and total cost of its graduate degree programs, particularly its Doctor of Business Administration (DBA) and Doctor of Education (EdD) programs.

Plaintiffs alleged that Walden lured prospective students by advertising streamlined credit requirements and flexible completion timelines. However, once students completed their required coursework and moved into the dissertation or capstone phase, the university allegedly instituted arbitrary delays and continuous rejections of capstone proposals.

• Advertised Path:
  1. Coursework
  2. Streamlined Capstone
  3. Graduation
• Actual Allegation:
  1. Coursework
  2. Continuous Capstone Delays
     • Extra Tuition Terms
     • Inflated Debt

Because Walden required students to remain continuously enrolled and pay full tuition for mandatory "enrollment continuity" courses while waiting for dissertation approvals, these delays added thousands of dollars to individual student debt loads without adding educational value.

Reverse Redlining Claims

A distinct aspect of the Walden litigation was the inclusion of claims under the Equal Credit Opportunity Act (ECOA) and the Title VI of the Civil Rights Act of 1964. The lawsuit alleged that Walden engaged in "reverse redlining"—a practice of intentionally targeting minority communities, specifically Black and female working adults, with aggressive marketing for expensive, predatory educational products.

The plaintiffs presented statistical data indicating that Black and female students represented a disproportionately large share of Walden’s doctoral enrollment and bore a disproportionate amount of student debt resulting from prolonged dissertation requirements.

Federal Regulatory Oversight

In addition to private civil litigation, federal authorities investigated Walden’s marketing representations regarding credit transferability, doctoral completion times, and clinical placement availability. Adtalem acknowledged these regulatory inquiries in its public SEC filings, maintaining dedicated financial reserves to address potential liabilities, legal defense expenses, and regulatory settlements related to Walden's operational history.

Summary of Legal Actions and Regulatory Controversies Across Adtalem Properties

To provide a clear comparative view of the regulatory and legal challenges associated with Adtalem’s current and historic institutional portfolio, the following table summarizes key enforcement actions, core allegations, and student financial impacts.

Financial and Regulatory Impacts on Students and Loan Forgiveness

The legal proceedings involving Adtalem and its subsidiary institutions have major implications for former and current student loan borrowers. Federal student loan policies provide specific pathways for relief when schools engage in deceptive practices.

Borrower Defense to Repayment Rules

Under federal loan regulations, federal student loan borrowers can apply to have their Direct Loans discharged if their school engaged in misconduct that violated state law or committed substantial misrepresentations.

For former students of Adtalem-owned institutions (specifically DeVry University during the 2008–2015 window and qualifying Walden University cohorts), the federal government has recognized specific categories of misrepresentation:

• Deceptive Outcome Statistics: Fabricated job placement statistics used during recruitment.
• Cost and Duration Misrepresentation: Substantial variance between advertised program costs and required expenditures forced through extended enrollment mandates.
• Transferability of Credit Misleading Claims: False assurances that academic credits earned would transfer seamlessly to other accredited institutions.

Detailed rules regarding eligibility requirements and claim forms are maintained directly on the federal StudentAid.gov Borrower Defense Information Portal.

Impact of the Sweet v. Cardona Settlement

The class-action lawsuit Sweet v. Cardona (formerly Sweet v. DeVos) drastically impacted student loan forgiveness for borrowers connected to for-profit higher education entities. The settlement agreement created two distinct classes of applicants:

1. Automatic Relief Class: Borrowers who submitted Borrower Defense claims prior to June 22, 2022, for a designated list of institutions—which explicitly included DeVry University and Walden University—received automatic loan discharges, full refunds of amounts paid to the Department of Education, and credit report repair.
2. Decision Class: Borrowers who applied between June 22, 2022, and November 16, 2022, were placed on a streamlined review schedule, requiring the Department of Education to issue individualized decisions within strict timeframes or grant automatic discharge.

• Sweet v. Cardona Class Structure
  • Automatic Relief Class (Filed before June 22, 2022): Full Discharge + Refund + Credit Repair
  • Decision Class (Filed June 22 – Nov 16, 2022): Streamlined Review Timeline

Step-by-Step Guide: How Affected Students Can Request Loan Relief

If you attended an institution managed by Adtalem Global Education during a period impacted by misrepresentation, you can take specific operational steps to review your eligibility and submit a formal claim for federal loan discharge.

1. Verify Attendance Dates & Program Details
2. Collect Supporting Evidence (Transcripts, Marketing, Emails)
3. Submit Application via StudentAid.gov Portal
4. Request Administrative Forbearance During Review
5. Track Case Status & Maintain Records

Step 1: Verify Attendance Dates and Academic Programs

Identify your exact dates of enrollment, degree track, and the institutional entity. Cross-reference your attendance dates against published regulatory findings:

• DeVry University: High-risk period for misleading employment metrics spans from 2008 through 2015.
• Walden University: High-risk period for extended capstone/dissertation charges primarily impacts doctoral students enrolled between 2008 and 2022.

Step 2: Gather Documentary Evidence

To construct a strong Borrower Defense claim, gather clear documentation showing that institutional claims directly influenced your enrollment decision:

• Program catalogs, brochures, or promotional emails promising specific job placement rates, salary projections, or program completion schedules.
• Written communications with academic advisers, enrollment counselors, or faculty members regarding dissertation delays, credit transfer rejections, or unexpected fee additions.
• Official transcripts showing credit hours completed versus total credit hours billed.
• Billing statements demonstrating charges for extended continuity terms or unannounced fee increases.

Step 3: Complete the Federal Borrower Defense Application

Log into your account at StudentAid.gov using your FSA ID and complete the electronic Borrower Defense application.

• Select your specific school (e.g., DeVry University or Walden University).
• State clearly how the school lied to or misled you regarding employment rates, program completion requirements, or total costs.
• Attach all collected documentary evidence directly to your application file.

Step 4: Request Administrative Forbearance

When submitting your Borrower Defense application, opt into administrative forbearance. This status allows you to pause monthly federal student loan payments and temporarily halt collections while the U.S. Department of Education adjudicates your claim. Note that while interest may accrue during certain forbearance periods, it is discharged completely if your application is approved.

Step 5: Track Application Status and Document Communications

Maintain copies of your confirmation number, submitted application text, attached evidence files, and all corresponding status updates from the Department of Education. If your contact information changes, update your StudentAid.gov profile immediately to ensure you receive critical legal notices.

Current Status of Adtalem Global Education

Adtalem Global Education continues to operate as a publicly traded company. The company has shifted its primary business focus toward healthcare training, positioning Chamberlain University and its medical education division as its primary growth drivers.

• Current Operational Focus (Adtalem Global Education)
  • Chamberlain University (Nursing Education)
  • Medical Schools (Ross University & AUC)
  • Postsecondary Oversight & Compliance Frameworks
    • Financial Responsibility Composite Scores
    • Gainful Employment Rule Adherence
    • Ongoing Department of Education Recoupment Defense

Regulatory Compliance and Financial Reserves

Adtalem maintains formal accounting reserves to manage potential legal liabilities and recoupment claims pursued by the U.S. Department of Education. The federal government retains the statutory right to seek reimbursement directly from institutional parent corporations for borrower defense discharges granted to students. Consequently, legal and regulatory risk disclosures remain a prominent component of Adtalem’s annual financial reporting (SEC Form 10-K).

Furthermore, Adtalem operates under heightened compliance oversight related to key federal higher education metrics:

• Financial Responsibility Composite Scores: Federal metrics evaluating the financial health and risk level of private institutions participating in Title IV federal student aid programs.
• Gainful Employment Regulations: Rules measuring debt-to-earnings ratios of graduates from career-focused and postsecondary programs. Institutions failing these standards risk losing access to federal financial aid.

Frequently Asked Questions

Is Adtalem Global Education the same company as DeVry?

Adtalem Global Education is the direct corporate successor to DeVry Education Group. In 2017, DeVry Education Group rebranded as Adtalem Global Education. Although Adtalem transferred DeVry University to Cogswell Education LLC in 2018, Adtalem remains legally responsible for liabilities, FTC settlement terms, and Department of Education recoupment claims associated with DeVry’s operations prior to the spinoff.

Are student loans for Walden University eligible for loan forgiveness?

Walden University student loans may be eligible for loan forgiveness under the Borrower Defense to Repayment program if the borrower can demonstrate that Walden made substantial misrepresentations regarding program length, degree costs, credit transferability, or dissertation requirements. Walden was also listed as an approved institution under the Sweet v. Cardona class-action settlement for class members who applied prior to June 22, 2022.

Does Adtalem still own DeVry University?

No. Adtalem fully divested DeVry University in 2018, transferring ownership to Cogswell Education LLC. Adtalem no longer manages the daily operations, admissions, or academic programs of DeVry University. However, Adtalem retains residual legal and financial liabilities stemming from federal enforcement actions covering the period when it operated the institution.

What was the outcome of the FTC lawsuit against DeVry?

The FTC lawsuit resulted in a December 2016 settlement totaling $100 million. DeVry paid $49.4 million in direct cash refunds to affected students and canceled $50.6 million in outstanding institutional debt owed directly to the university by qualifying undergraduate students.

What should doctoral students affected by extended Walden programs do?

Doctoral students who experienced arbitrary program extensions, continuous enrollment fee requirements, or misleading program completion estimates should gather all enrollment agreements, program catalogs, adviser communications, and billing records. Affected borrowers can submit a Borrower Defense to Repayment application via StudentAid.gov citing program duration and cost misrepresentations.

Practical Recommendations for Students and Borrowers

If you are a current student, former student, or prospective applicant evaluating programs under Adtalem Global Education, take the following concrete steps:

1. Audit Your Student Loan Records: Access the National Student Loan Data System (NSLDS) via StudentAid.gov to download your full Student Aid Data File. Identify all federal Direct Loans, FFEL Loans, and Perkins Loans associated with Adtalem institutions.
2. Review Borrower Defense Eligibility: If you enrolled based on false advertising or suffered monetary harm due to misleading program timelines at DeVry or Walden, compile your documentation and file a formal Borrower Defense application.
3. Consolidate Commercial FFEL Loans if Necessary: If you hold legacy FFEL loans that are commercially held and want to participate in federal discharge programs or income-driven repayment plans, evaluate whether consolidating into a Federal Direct Consolidation Loan is appropriate for your situation.
4. Document Academic Communications: If currently enrolled in a graduate program, maintain an independent archive of all faculty communications, dissertation feedback timelines, capstone submission dates, and fee assessments to protect your educational record.