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California AG Becerra Sues Ashford U Over Fraud, Illegal Debt Collection

Thursday, November 30, 2017
Graciela Aponte-Diaz

OAKLAND, CALIF. –  On November 29, California Attorney General Xavier Becerra sued Ashford University, a for-profit and online college based in San Diego. The suit alleges that Ashford made false promises and provided false information to boost enrollment.  Illegal debt collection practices and misleading information given to investors and the Securities and Exchange Commission are also alleged. 

In response, Graciela Aponte-Diaz, Center for Responsible Lending’s California Policy Director made the following statement:

Once again, a for-profit college is accused of prioritizing profits over quality education. Among the estimated 40,000 students enrolled at Ashford University, the majority are either low-income consumers or veterans – both seeking an education to work their way into the middle class. Instead, they have been pressured by sales persons posing as admissions counselors to boost the institution’s profits. 

California’s lawsuit also represents the second time that Bridgepoint Education, Ashford’s parent firm, has been sued for bad practices. In September 2016, Bridgepoint settled a lawsuit (PDF) filed by the Consumer Financial Protection Bureau and agreed to pay over $23.5 million in consumer relief and an $8 million fine for deceiving students into taking out unaffordable, and high-cost private student loans.

There is also something seriously wrong when less than 10 percent of students are enrolled in for-profit schools but represent nearly a third of federal student loan defaults. Or why does an Ashford bachelor’s degree typically cost $60,000 -- nearly double that of nearby San Diego State or California State University’s East Bay?

Attorney General Becerra is taking actions to hold bad actors accountable in court. His leadership will hopefully inspire state lawmakers to also actively support California consumers struggling with student loan debts.

 

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Charlene Crowell at charlene.crowell@responsiblelending.org or 919.313.8523.