Bridgepoint and Ashford U. Settle With Iowa Over Enrollment Tactics

May 16, 2014

Bridgepoint Education Inc. and its Ashford University have reached a $7.25-million settlement with the Iowa attorney general over allegations that the university misled and pressured students to enroll, the company and Attorney General Tom Miller announced on Friday.

As part of the 24-page settlement, known as an "Assurance of Voluntary Compliance," Bridgepoint and Ashford denied any wrongdoing but agreed to not use any "unconscionable or coercive tactics" to encourage students to enroll. They also agreed to disclose in writing to any students enrolled in Ashford’s College of Education programs that "an online degree from Ashford University does not lead to immediate licensure in any state" and that the program is not accredited by three major teacher-accreditation bodies.

The attorney general’s office had contended that Ashford misrepresented to students in its College of Education that the program would allow them to become teachers.

The attorney general had also accused the company of charging students a nonrefundable technology fee six weeks into their courses, in some cases as high as $1,290, even if the students dropped out.

Under the settlement, an independent administrator will oversee the terms of the agreement for three years and report annually to the state on the company’s compliance with it. The administrator will have the right to observe the company’s training of admissions representatives and to review their telephone calls with prospective students.

In a news release, Mr. Miller called the outside oversight "a key part of the agreement." He said about $7-million of the settlement would reimburse current and former Ashford online students from Iowa.

In a statement, Bridgepoint said it had never misled students about enrolling in Ashford and denied "ever using ‘unfair or high-pressure sales tactics, including emotionally charged appeals to persuade prospective students to make uninformed decisions to enroll.’" Bridgepoint and Ashford also said they "welcome the appointment of a settlement administrator and look forward to demonstrating the university’s high-quality admissions practices."

Iowa is one of about two dozen states where attorneys general are investigating or conducting inquiries into for-profit colleges.