The federal Consumer Financial Protection Bureau has ordered Bridgepoint Education Inc., owner of the for-profit Ashford University, to forgive all outstanding private student loans and to refund any payments already made on those loans.
According to a statement from the agency, Bridgepoint deceived its students by charging them higher-than-advertised monthly loan payments and now must refund or forgive more than $23.5 million in money paid or still owed. The bureau has also ordered the company to pay an $8-million civil penalty.
“The representatives in many instances made oral statements to students about the potential costs of the loans, including that students normally paid off institutional loans from respondent with $25 monthly payments,” the agency’s consent order reads. These amounts later turned out to be much higher, according to the bureau.
Bridgepoint has been under investigation by the U.S. Department of Justice since July. That probe concerns whether the company violated the federal 90/10 rule, which requires colleges to earn at least 10 percent of their revenue through means other than federal student aid. The Education Department also investigated Bridgepoint’s marketing practices in 2012.
Bridgepoint said in a statement on its website that its colleges had “acted in good faith and provided all appropriate tools and disclosures for the loan programs,” and that it hopes the agreement will allow the company to turn its attention back to its students’ success.Return to Top