DeVry Education Group, the parent company of the for-profit DeVry University, has announced that Lisa Wardell has taken over the role of chief executive officer effective May 24. Wardell is succeeding Daniel Hamburger, who is leaving the role to pursue other opportunities.
Wardell first became a member of the DeVry Group board of directors in 2008. She has also chaired the audit and finance committee, and the 46-year-old was most recently executive vice president and chief operating officer of RLJ. She worked as a senior consultant at Accenture in the late 1990s and directed a team that resulted in the opening of a luxury resort in Liberia in 2009.
She was also involved in the creation of the Dallas-based RML, one of the largest minority automotive dealerships in the United States with $1.3 billion in annual sales, reports Steven Strahler for Crain’s Chicago Business.
“The board is indebted to Daniel for his 13 years of service to DeVry Group, particularly the past nine years in his role as CEO,” Ron Taylor, co-founder of DeVry and a current board member, said in a statement. “Under his leadership, DeVry Group has transformed from primarily serving undergraduate and business school students in the United States to a global education provider—all while staying true to our mission of serving nontraditional students.”
Hamburger joined DeVry in 2002 and became CEO in 2006. During his 9-year tenure at the company, DeVry was initially successful, much like most of the for-profit industry. However, DeVry shares lost two-thirds of their value along with an increase in student debt and a decrease in available jobs for graduates.
The school became the subject of a Federal Trade Commission inquiry in 2014 into alleged deceptive advertising practices associated with claims that its graduates “report earning 15 percent more than the median” for all students who graduate with a bachelor’s degree one year after completing their schooling.
The FTC filed suit in January, at which time DeVry stock went down 15%.
According to a Brookings Institution report released last year, students attending DeVry University collectively held over $8 million in federal student debt through 2014, the fourth-largest amount among colleges and universities in the United States. However, DeVry argued against the findings, saying the loans “most likely” were counted twice through the addition of existing debt from transfer students at the school.
Atlanta-based analyst Bradley Safalow, who is also a short-seller of DeVry stock, said Hamburger had “grossly overpaid” for US Education Corp. in 2008 as well as some other purchases. He went on to accuse Hamburger of seeking out “lower-quality students in an effort to sustain break-even profitability.”
Safalow also said Hamburger did not handle the FTC inquiry appropriately, arguing that it was without merit, “yet at every turn thus far the company has lost its court battles and the suit continues to escalate.”
He added, “More than anything, this abrupt departure suggests that something has happened for Mr. Hamburger that we do not yet know about—a scary proposition for investors.”
A similar move came from a Chicago company currently under federal investigation. United Continental Holdings replaced their CEO Jeff Smisek last September with board member Oscar Munoz.