State sues for-profit Ashford University
November 30, 2017
• Suit says company defrauded and deceived its students
• “No school should ever steal the American Dream from its students”
California is suing Ashford University, an online for-profit school based in San Diego, and its parent company Bridgepoint Education, for engaging in unlawful business practices.
In the lawsuit, Attorney General Xavier Becerra alleges that Ashford made false promises and furnished faulty information to students to persuade them to enroll. It also used illegal debt collection practices when students struggled to pay their bills, the lawsuit says.
The state’s lawsuit seeks restitution for students, a permanent injunction prohibiting similar activities in the future, and civil penalties from Ashford University.
“No school should ever steal the American Dream from its students, but that is exactly what Ashford University did,” says Mr. Berea. “Ashford University preyed on veterans and people of modest means. This for-profit college illegally misled students about their educational prospects and unfairly saddled them with debt. In today's economy, college is too pivotal and precious to let a predatory for-profit company swindle our daughters and sons out of the higher education they'll need to get ahead.”
Bridgepoint begs to differ. In a written statement it says, in part, “We intend to vigorously defend this case. We look forward to sharing the facts and success stories of our students and our school.”
According to the state, in 2005, Bridgepoint Education bought a tiny non-profit Catholic university in Iowa named Franciscan University of the Prairies. It cut the school’s ties with the Catholic Church, rebranded it as Ashford University, and used the school’s access to federal education funds to build “an online empire with over 80,000 students by 2012.”
Mr. Becerra alleges that Ashford accomplished its massive growth with “an army of ‘admissions counselors’ who were really salespeople working in boiler-room conditions. The complaint alleges that Ashford's administration subjected the admissions counselors to extreme pressure to meet enrollment targets and that it verbally and psychologically abused them when they fell short.
The complaint further alleges that:
• Ashford's salespeople made a wide variety of false and misleading statements to prospective students to meet their enrollment growth targets, including how much financial aid students would get, how many prior academic credits would transfer into the school, and the school’s ability to prepare students for careers in fields like social work, nursing, medical billing, and teaching;
• For-profit Ashford misled investors and the public in its filings with the Securities and Exchange Commission by inflating the percentage of working alumni who reported that their Ashford degree prepared them for their current job;
• Because of Ashford’s misrepresentations, Ashford’s students, many of them low-income, were often saddled with unexpected tuition expenses and other debts they could not afford. To collect that money, Ashford engaged in aggressive and illegal practices such as threatening and imposing unlawful debt collection fees.