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National CrossTalk Fall 1999
News Editorial Other Voices Interview

5 of 6 Stories

By Alexander Russo
CHICAGO, ILLINOIS

Within a single week last November, DeVry, Inc., the publicly traded company that owns a national chain of for-profit postsecondary schools known as the DeVry Institutes of Technology, announced a whopping 15.5 percent enrollment increase, received a Better Business Bureau award and was sued by three recent graduates for failing to provide an adequate education.

The day after the lawsuit was announced, DeVry stock tumbled 22 percent, but a few weeks later, the stock had rebounded. These recent events are typical of DeVry's 70-year-long roller coaster ride.

Walk up to the DeVry campuses in Chicago or suburban DuPage County-two of 21 nationwide-and you will see nondescript buildings that resemble offices more than anything else. Inside, old-fashioned electrical scopes with dangling clamps and eerie green and black screens sit alongside modern computers that have large color monitors, in the electronic labs that are DeVry's signature teaching environment.

Founded by inventor Herman DeVry in 1931 as a film and radio repair school, DeVry was for many years a little-known subsidiary of Bell & Howell. During those years, the school was known mainly for its late-night television ads and matchbook-cover recruitment efforts.

In 1987, however, DeVry was bought by the Keller Graduate School of Management, run by Dennis Keller and Ron Taylor, who had started out working at DeVry years before. Since Keller and Taylor took over, DeVry has grown into one of the largest proprietary (for-profit) higher education institutions in the nation.

The 21st DeVry Institute recently opened in Orlando, Florida. Undergraduate enrollment has reached 47,000 and has increased by 85 percent since 1995. Earnings and stock market performance have been strong.

DeVry's enrollment is racially diverse-45 percent minority, 42 percent white last year. ("Not known" accounted for 12 percent.) Successful graduates include Carl Ray, executive director of NASA's small business research and technical transfer programs, and Kathryn Wolfe, president of Zenith Sales Co., the consumer division of Zenith Electronics.

Although the two-year electronics program is still offered, four-year degrees in computer information systems and telecommunications are now the most popular choices of DeVry students.

DeVry is certainly not alone in its recent success. The University of Phoenix has almost 100,000 students enrolled in degree programs, on campuses across the country. Nearly half of all U.S. postsecondary institutions are proprietary, according to the Career Training Foundation's FactBook 2000, and almost 40 percent of the institutions eligible for federal funding are run for profit.

Proprietary education companies now account for more than 13 percent of all education spending in the U.S., and market penetration is highest among postsecondary schools, with 1999 earnings of more than $8 billion, according to Eduventures.com, a Boston-based education research and analysis firm.

"In many ways, the postsecondary market has been the real success story of the education industry," said Tom Evans, a senior analyst at Eduventures.com.

Tightened regulations have weeded out more than 1,300 of the shakiest trade schools and career academies during the past decade, and many of the for-profit schools that remain-particularly large corporate institutions-have thrived.

Like many other proprietary institutions, DeVry has been aided by a population boom among college-age students; the growth of technology-related fields; an increased awareness of the financial benefits of a college degree; and the strongest economy in decades. As the student loan default rate has declined, and many nonprofit institutions have rushed to create for-profit spin-offs, some states and accrediting agencies have eased requirements for proprietary institutions and have increased their access to state financial aid programs. More than 80 percent of DeVry students receive some kind of financial aid. DeVry has no research mission to uphold and no tenured faculty to deal with. There is no athletic department or extracurricular activities budget; little attention is paid to community service; and there is no mandate to offer small-enrollment classes.

The result is a lean, no-frills education that is focused on preparing students for their first jobs. All DeVry schools run on a year-round calendar, made up of three 15-week semesters. Buildings open at 7 am and close at 11 pm during the week, and are open on weekends.

 
Electronics Engineering student Ivana Djordgevic likes DeVry’s program, but is tired of defending the school’s reputation.  
The DeVry model is based on building or leasing relatively large, stand-alone campuses, of about 100,000 square feet, each serving 3,000 to 4,500 students. Each campus has its own library, cafeteria, tutoring center, career planning office, faculty offices and computer lab. DeVry students start in on their program requirements almost immediately. There are few general education courses. (One does not go to DeVry for a degree in 17th century British poetry.) Classes have as many as 60 students, and computer labs that are often filled to capacity stretch the ability of teachers to provide assistance. The facilities are no more than adequate.

But DeVry has built a strong reputation in technology training and claims a 96 percent job placement rate after graduation.

Most DeVry faculty members have both a master's degree and real-world experience. About 40 percent are fulltime, the rest are part-time adjunct instructors. The workload is heavy.

Lynn Marie Burks is an assistant professor of economics on the DuPage campus who has been a fulltime faculty members since 1992. She teaches five or six classes per semester, each of which meets for three or four hours a week, with 40 to 60 students in each class. In addition, she holds office hours. For this, Burks and other DeVry faculty members earn an average annual salary of $50,000.

With a tuition fee of just under $4,000 per semester, DeVry and others are able to "under-price the privates and slightly overprice-but out-convenience-the publics," said Keith Sanders, executive director of the Illinois Board of Higher Education.

"They are the ultimate convenience institution," he added. "They are able to provide instruction at a time and in a place and in a way that seems to be suited well to the needs of students and is not in any way dictated by the needs of faculty or management." Many students like this approach.

"The worst thing about this school is no activities such as sports," said Tiffany Howell, a 20-year-old electronics engineering student who is currently in her fifth semester at the Chicago campus and is well-satisfied with the program. In addition to taking a full course load, Howell has jobs at DeVry and at a telemarketing company.

"You can't come here and not expect to work your tail off," said Adam Hutchins, 20, a business student at the DuPage County campus who hopes to go into supply chain management logistics. "I feel I know more than anyone else in my area."

Hutchins had considered the University of Iowa but chose DeVry because of its good job placement record and short time to graduation. "I got through in two years and eight months," he said proudly. Hutchins also works 20 hours a week for DeVry's housing department and is a resident manager for eight apartments leased for students by DeVry. "If you come here, you don't expect a college life," he said.

But not all DeVry students are happy with the education they received. The lawsuit, filed last November by three 1999 computer graduates of the Chicago campus, with strong grade point averages, accuses DeVry of fraud and deceptive practices.

In essence, the students are claiming that DeVry's computer programming degree program is weak and outdated and that the school recruits unprepared students in order to generate tuition revenue. The suit claims that DeVry practices "widespread deception" and fails to prepare its computer programming students for high-tech jobs. Specifically, DeVry "failed to provide instruction in current technologies and computer languages, such as Java script," the complaint says.

But other graduates disagree. "DeVry does have its weak points but so does every other university," said Brent Baker, who graduated from the Kansas City branch in 1999 with a degree in computer programming. "People think that just because you pay tons of money for tuition, that somehow the school should be the best in the world."

Other students blame employers, not DeVry, for expecting too much from recent graduates. "My opinion is that companies should not expect new [graduates] to be seasoned programmers," said Bruce Perkins, a 27-year-old computer programming student who enrolled at the Chicago campus after a stint in the military. "It's up to the company to teach you."

The circumstances that led to the law suit can be traced to some of DeVry's particular characteristics, especially its aggressive marketing approach. Glowing testimonials from DeVry graduates and glossy ads can be seen regularly on local television and outdoor advertisements in Chicago and other cities.

The advertising seems to be integral to DeVry's success-it was mentioned by nearly every student interviewed for this article-but it also has the potential to anger students if the promises do not lead to the kinds of jobs they want.

Proprietary schools are vulnerable on this count because "they make much more explicit vocational promises than nonprofits," said John Lee, president of JBL Associates, a postsecondary education policy research firm. But few make and promote their claims as aggressively as DeVry, which has staked its reputation on its job placement rate.

 
"I guess I chose DeVry after seeing too many of their commercials on TV," said a 25-year-old computer programming student who did not wish to be named. He derided the school as no more than an "in and out option. They're going to get you in, they're going to teach you the basics and they're going to get you out."

Similarly, DeVry's strong reputation for technology training can be a two-edged sword. The difficulties of providing updated technology courses and equipment are enormous, because technology is changing so rapidly. While their defenders claim that for-profit schools update equipment and curriculum more often than most nonprofits, "a company like DeVry has to be extremely careful to adjust to changing technologies," said Tom Evans, of Eduventures.com. At the same time, DeVry must teach computer students enough concepts and theory so they can learn new computer languages on the job.

While many students report that DeVry's training and equipment are better than at other schools, some say they are often left to fend for themselves without enough support or equipment.

"Some people come with the idea that you're going to learn absolutely everything by the time you graduate," said Parsifal Gomez, 23, a 1999 graduate of the Chicago campus who now makes a living as a Web site developer. "That is a serious misconception."

Instructors like Stacye Clark acknowledge that helping students learn technology is a challenge but think the school is up to it. "They teach you how to learn" said Clark, a well-liked instructor who graduated from DeVry ten years ago, went on to get a master's degree, and now teaches computer programming part-time at the Chicago campus. "Being in technology, it's constantly changing," she said. "You have to learn how to stay abreast of things."

DeVry's success in attracting minority students, some of whom have had poor high school preparation, might be having a negative effect on student satisfaction, the level of instruction provided and program completion rates. DeVry recently reported that only 26 percent of the students in computer information systems completed the program in a reasonable length of time. More than 12 percent of DeVry students default on their student loans, a sign that some students are struggling to find adequate work after graduation.

Students with modest skills and abilities may struggle in technical programs that, despite their vocational focus, require extensive use of mathematical concepts and abstract thinking. Tutoring and some remedial courses are provided but several students complained about under-prepared classmates and reported that teachers who try to make sure that no student is left behind actually dilute the program.

"Sometimes the recruiters go overboard," Parsifal Gomez said. "Sometimes in the recruiting process they tried to convince people to come to the school whether they believe the person is ready or not."

This puts tremendous pressure on DeVry instructors, some of whom were criticized by students. "I just don't think that their staff is fit at all," said a student who feels that many junior faculty in his program lack sufficient knowledge. "I don't feel that a lot of professors want to be there." Students often are left to fend for themselves, he said, sharing work among themselves and struggling to find available computers to do lab work.

Regardless of the outcome of the lawsuit, DeVry faces other serious challenges. There are regulatory obstacles in some states, and the institutes lack regional accreditation in some desirable parts of the country.

Competition is increasingly keen-not only from other proprietary schools but from traditional colleges and universities that are placing new emphasis on technical training and on making the collegiate experience convenient for students.

Despite its reputation for teaching technology well, DeVry has been slow to enter the online education field. Together, DeVry and the Keller Graduate School of Management have only about 1,000 online students, and lack of online registration is a common student complaint.

DeVry also continues to wrestle with an old problem: the questionable reputation that it and all proprietary schools have with some portion of the general public. Ivana Djordjevic, an electronics engineering student who has been attending DeVry off and on for the past three years, likes the program but says she considered transferring because she was tired of defending the school. While her grades are high and she is confident of finding a good job, Ivana worries that the lawsuit will encourage potential employers to question her skills and knowledge.

And this burden does not fall only on students. Lynn Marie Burks, the economics instructor at the DuPage campus, said DeVry's reputation is one of the hardest parts of her job. "People still have this notion we teach refrigerator repairmen," she said.

Despite these difficulties, DeVry officials do not appear to be worried. The day after the lawsuit was announced, there was little apparent nervousness at corporate headquarters in Oak Brook, a Chicago suburb. Ron Taylor, the company's Harley-riding president and chief operating officer, sat calmly in his "Friday casual" clothes and talked about DeVry's past accomplishments and future plans, without any indication that the company had just lost one-fifth of its stock market value.

 
An electronics lab at DeVry’s Chicago campus. The schools claim a 96 percent job placement.  
One reason is that several improvements are already in the works. A new set of labs has been added to the Chicago campus. Additional technological and management innovations are being implemented, according to Jerry Dill, president of the DuPage and Tinley Park campuses. There are reports that a new e-commerce program will be added, to help students learn popular Internet business applications.

A computer programming student at the Chicago campus said the school recently has responded to complaints by offering more up-to-date courses and by providing more tutors. "I think a lot of stuff has changed," he said. "I think the technology and the variety of (computer) languages has grown at DeVry."

DeVry has begun to mount a vigorous defense against the lawsuit, backed by evidence that the majority of graduates are doing well. The institute claims that 86 percent of the students who graduated in the same program as the three plaintiffs were employed within six months of graduation, at an average salary of just under $39,000.

DeVry has been through all of this before. The stock suffered through much of 1999, largely due to problems facing other for-profit institutions. But DeVry's planning and attention to detail saw the schools through that slump and, many experts agree, should serve them well in the future.

Michael Moe, an analyst for Merrill Lynch and author of The Knowledge Web, an annual education industry report, summed it up succinctly: "From an operations standpoint, my view is that DeVry continues to click on all cylinders."

Alexander Russo is a Chicago-based freelance writer.

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