DES MOINES, Iowa (Legal Newsline) - Iowa Attorney General Tom Miller announced a $7.25 million settlement on Friday with a for-profit school and its parent company to resolve allegations of Consumer Fraud Act violations.
Ashford University and its San Diego-based parent company, Bridgepoint Education Inc., allegedly used unconscionable sales practices such as false or misleading statements, unfair and high pressure sales tactics, and failing to disclose material facts to prospective students. Ashford also allegedly misrepresented that an online Ashford education degree would allow them to become classroom teachers and charged a significant upfront technology fee.
Miller's office received multiple complaints filed by current and former Ashford students alleging the online school's conduct resulted in students not obtaining professional licenses, not completing their educational programs and being burdened with substantial student loan debt.
"Our investigation found what we allege was troubling conduct by Ashford recruiters, including misleading prospective students to encourage them to sign on the dotted line," Miller said. "Unfortunately for many Ashford students, they didn't get the degree they hoped for or the job they were led to believe they'd get after graduating. What they did end up with was a crushing amount of student loan debt."
Under the terms of an assurance of voluntary compliance, Ashford and Bridgepoint must pay $7.25 million to the state, approximately $7 million of which will reimburse former and current Ashford online students from Iowa. Ashford must also must comply with minimum standards in its future representations and disclosures to prospective and current students around the country.
Bridgepoint also agreed to submit to an independent settlement administrator who will oversee the company's settlement compliance.
"We think oversight is a key part of the agreement," Miller said. "It gives a new independent watchdog the power to oversee how Ashford complies with the tough new standards we establish through this agreement."