VA Backs Off Threat to Cut GI Bill Funding for Ashford University

Ashford University will maintain its GI Bill eligibility — for now.

The for-profit institution, which was the subject of a Chronicle investigation in November, faced a Tuesday deadline from the U.S. Department of Veterans Affairs to be approved by the veterans agency in its home state. Failure to get that approval, the department had warned, would lead the federal government to “suspend payments” for the thousands of GI Bill students who attend Ashford.

In the days leading up to the deadline, the stock price of Ashford’s parent company, Bridgepoint Education, had slipped to $7.60 a share — its lowest price in over a year.

But the department has backed down somewhat from its threat, and Ashford will continue to receive millions in GI Bill dollars even though its state-approval status is still unsettled. The key concession made by Ashford: The university applied this month with the state of California to be recognized for GI Bill purposes.

Ashford had previously gone to great lengths to obtain its state authorization from someplace other than California, which has a reputation for tough scrutiny of for-profit schools. The Chronicle’s investigation showed that Ashford had obtained a fast-tracked approval from Arizona regulators, with help from the governor’s office and U.S. Sen. Jeff Flake, Republican of Arizona, even though the university had only a small rented office in the state.

Under federal GI Bill rules, a college is supposed to be approved by its home state, and Ashford’s corporate headquarters is in San Diego.

In November, a week after the department threatened to cut off funding, Ashford asked an appeals court to overturn the agency’s finding that the university lacked proper state approval. That case remains pending.

An Ashford University representative did not respond to a request for comment on Tuesday.

Curt Cashour, a department spokesman, told The Chronicle on Tuesday that there was a risk the courts would halt any enforcement action while the appeal was pending, and that, “in that event, VA would still be paying benefits and Ashford would not be undertaking any corrective actions.”

Instead, the department opted to voluntarily agree to continue funding Ashford’s GI Bill students until the federal appeal is resolved — so long as Ashford applies for California approval, which it did on Friday. And if California ultimately approves Ashford’s application, Mr. Cashour wrote in an email, that would bring the university “into compliance with VA rules and federal law.”

Michael Vasquez is a senior investigative reporter. Follow him on Twitter @MrMikeVasquez, or email him at michael.vasquez@chronicle.com.