For-profit giant DeVry University to close Portland branch as fallout spreads in controversial industry

DeVryPortland.jpg

DeVry University, a giant in the controversial for-profit college world, will close nine campuses nationwide including its Portland branch by year's end. The chain, which gets most of its revenue from federal funds, cited declining enrollment.

((Courtesy of DeVry University))

DeVry University's Portland campus will close, along with 13 other branches in the national chain, as fallout continues in the for-profit college industry.

More

The closure by year's end will affect about 100 Portland students, more than 45 percent of whom take classes entirely online. The school, at 9755 S.W. Barnes Rd., offers undergraduate and graduate programs ranging from business management and health sciences to engineering and liberal arts. It will shift Portland students to online classes only.

The closures are part of a national trend among for-profit universities, which have been criticized for high tuition costs, low retention rates and heavy federal support. When Corinthian Colleges Inc. was sold in February, students and former students of the embattled career college got $480 million in debt forgiveness. Corinthian had about 1,000 Portland-area students.

Then-Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor and Pensions Committee, listed DeVry and Corinthian in a 2012 report as among for-profits with the country's highest student-loan default rates. At that time, DeVry was the nation's third-largest education company with more than 128,000 students.

"Executive compensation across the for-profit sector drastically outpaces both compensation at public and non-profit colleges and universities, despite poor student outcomes at many for-profit institutions," the Harkin report said. "In 2009, DeVry CEO Daniel Hamburger received $6.3 million in compensation, more than 46 times as much as the president of the University of Illinois at Urbana-Champaign."

Harkin's report, resulting from two years of research, found that 80.9 percent of DeVry's total 2010 revenue was comprised of federal education funds, mostly from Title IV financial aid programs.

An article in The Nation a year ago also found that federal tax dollars accounted for about 80 percent of DeVry's revenue.

"DeVry schools report a sky-high 24 percent student-loan default rate, higher than their 22 percent graduation rate," said the article, adapted from an e-book by David Halperin, "Stealing America's Future: How For-Profit Colleges Scam Taxpayers and Ruin Students' Lives."

On Friday, former President Bill Clinton resigned as honorary chancellor of Laureate International Universities, the world's largest for-profit college chain. His departure came nearly two weeks after his wife, Hillary Rodham Clinton, criticized the for-profit college industry as she began her second presidential campaign.

The DeVry Education Group Inc., a publicly traded enterprise based in Downers Grove, Ill., announced declines in enrollments and earnings for the fiscal quarter ending in March.

On Friday, spokeswoman Katie Pearson gave no specific reason why Portland would be among the campuses closing. Instead she pulled the following quote from the national university's 2014 academic report:

"The still-uncertain economic environment in the United States meant that enrollments were down, not only at DeVry University but also in every sector of higher education in the U.S., with many potential students hesitant to commit to pursuing a college degree mainly because they lack confidence in the job market."

For the March session at DeVry University's almost 100 branches, new undergraduate enrollments decreased 17.2 percent nationally to 4,156, a news release said, compared to 5,018 the previous year.

Pearson said in an email that the Portland branch would handle the closure with care. "If students choose to take their remaining courses online," she wrote, "they are eligible for a 20 percent tuition savings for the remainder of their degree program."

Likewise, Pearson said, students transferring to another DeVry campus would receive 20 percent discounts.

The Commercial Appeal, a newspaper in Memphis, where one of the closing DeVry branches is located, reported closures would include those in Seattle; Detroit; Indianapolis; Milwaukee; Minneapolis; Pittsburgh; St. Louis; and Tampa, Fla. A Houston campus will close at the end of next year, the newspaper said.

In Friday trading on the New York Stock Exchange, DeVry Education Group dropped more than 16 percent to post a new 52-week low of $31.41 after closing at $37.57 on Thursday. The stock's 52-week high is $49.61.

rread@oregonian.com

503-294-5135; @ReadOregonian

If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement and agree that your clicks, interactions, and personal information may be collected, recorded, and/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.