California Attorney General files lawsuit against Ashford University

SAN FRANCISCO (KUSI) — California Attorney General Xavier Becerra announced Wednesday he 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 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. Attorney General Becerra 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,” said Attorney General Becerra. “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.”

In 2005, Bridgepoint Education bought a tiny nonprofit Catholic university in Iowa named Franciscan University of the Prairies. Bridgepoint cut the school’s ties with the Catholic Church, rebranded it as Ashford University, and exploited the school’s access to federal education funds to build an online empire with over 80,000 students by 2012. Ashford University proceeded to close the original Franciscan University’s brick and mortar campus in Iowa in 2016.

Attorney General Becerra alleges that Ashford accomplished its massive growth with an army of “Admissions Counselors” who were really salespeople working in toxic boiler-room conditions. The complaint alleges that Ashford’s administration subjected these "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. 

Bridgepoint released the following statement after Attorney General Beccera’s lawsuit announcement:

Bridgepoint’s institutions serve as a model for how online education can better the lives of people who did not, or who were unable to, pursue more traditional avenues to degrees. Thousands upon thousands of our current students and graduates can attest to the educational value provided by our undergraduate and graduate programs that have bettered their lives. We are extraordinarily proud of our well-deserved and hard-earned reputation for improving the lives of thousands of students by providing a high-quality education that serves communities and gives families the opportunity to succeed. We intend to vigorously defend this case. We look forward to sharing the facts and success stories of our students and our school, because we’re proud of our work and confident that we’ll be fully vindicated.

Current and former Ashford University students and others who may have been harmed by Ashford’s misconduct who wish to file a complaint may contact the Attorney General’s Office at (800) 952-5225 or oag.ca.gov/report.