The Clinton Herald, Clinton, Iowa

May 22, 2014

Ashford settlement part of a larger scale

By Brenden West
Clinton Herald

CLINTON — The Iowa Department of Justice isn’t working alone on cases against for-profit, online institutions. Attorney General Tom Miller announced on May 16 that Ashford University (whose campus is in Clinton) and parent company Bridgepoint Education (based in San Diego) agreed to a $7.25 million settlement, which will help cover expenses incurred by misled online students within the state.

That investigation is part of a larger, multi-state operation that spans the continental U.S.

DOJ communications director Geoff Greenwood confirmed on Wednesday that 16 other states are collaborating and sharing resources with Iowa. They are: Arizona, Alaska, Colorado, Connecticut, Hawaii, Idaho, Illinois, Kentucky, Missouri, Nebraska, North Carolina, New Mexico, Oregon, Pennsylvania, Tennessee and Washington.

Miller said Iowa-based online students who used Ashford will be entitled to reimbursements garnered from the settlement. A settlement administrator, Tom Perrelli, has been appointed to ensure Ashford/Bridgepoint follow through on terms of the agreement.

Greenwood said he’d be “predicting the future” on whether or not to expect similar settlement announcements from other attorneys general in the days to come. However, through email correspondence, he added, “The states are collaborating as we all work through these cases. We are sharing tasks and information, and we are in communication through conference calls and meetings.”

A member of Illinois Attorney General Lisa Madigan’s staff confirmed that two active investigations are taking place in the Prairie State. She couldn’t comment on the nature of the cases, though.

Madigan previously announced a lawsuit against Westwood College in 2012, alleging similar practices to those alleged by Miller against Ashford/Bridgepoint. She filed another suit in 2011 against Education Management Corporation (EDMC), one of four online for-profits Miller named under his ongoing investigations last week.

Greenwood said the Ashford settlement was unique in that the other cases “are independent of each other and all involve more than a dozen states...” He characterized the multi-state investigations as a “group,” adding that other additional states are conducting their own cases independently.

Along with EDMC, Miller announced the DOJ is actively investigating ITT, Career Education Corporation (CEC) and Corinthian Colleges Inc. Attorney General offices from Kentucky, Connecticut, Iowa and Pennsylvania are leading those investigations. As with Ashford, skeptical recruiting, lead generation, enrollment qualifications and students complaints are among items being looked into. At least 12 states are collaborating with each case.

Bridgepoint Education is a publicly traded commodity. Since Miller’s announcement on Friday, share prices have dropped 20 cents to $14.40 per share. That follows a more dramatic drop in March, when President Obama announced harsher restrictions for for-profit institutions receiving federal aid. Bridgepoint fell from $19.01 a share to $16.02 in just one day, and the price has made a slow decline to its current state.