California AG Recovers $22 Million from Online University

Bernard Nash
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  • California AG Rob Bonta secured over $22 million in civil penalties from online for-profit school Ashford University and its parent company (collectively, “Ashford”) after a state court found that Ashford made false or misleading claims in order to persuade students to enroll, in violation of the state’s Unfair Competition Law and False Advertising Law.
  • According to the Complaint, Ashford’s admissions department frequently made false and misleading statements, including baseless assurances to students about the school’s ability to prepare students for careers in fields requiring licensure or certification, how much financial aid students would receive, the cost of attendance, the pace of an Ashford degree, and how many prior academic credits would transfer into the school. The Complaint further alleges that Ashford was aware of this misconduct but failed to make systemic changes.  As a result, enrolled students, who were often low-income, incurred significant debt owed to Ashford, which Ashford collected through allegedly aggressive and illegal debt-collection practices.
  • The Court found that the length and nature of Ashford’s deceptive practices justified the civil penalty, but declined to impose injunctive relief for the Company’s debt collection practices, which the Company had already voluntarily ceased.
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