California Attorney General Xavier Becerra on Wednesday announced a lawsuit against for-profit Ashford University and its parent company, Bridgepoint Education.
Becerra alleges that Ashford made false promises and provided faulty information to students to persuade them to enroll. The lawsuit also alleges the institution used illegal debt collection practices while students struggled to pay their bills.
"No school should ever steal the American Dream from its students but that is exactly what Ashford University did," Becerra said, in a news release. "Ashford University preyed on veterans and people of modest means. This for-profit college illegally misled students about their educational prospects and unfairly saddled them with debt."
The suit further alleges that Ashford's salespeople made false and misleading statements to potential students about enrollment growth, how much financial aid students would get, how many prior academic credits would transfer into the school and Ashford's ability to prepare students for careers. Becerra also said Ashford misled investors and the public in filings with the U.S. Securities and Exchange Commission by inflating the percentage of working alumni who reported that their Ashford degree prepared them for their current jobs.
The attorney general's office is seeking restitution for students, civil penalties and a permanent injunction prohibiting similar activities in the future from Ashford.
The embattled for-profit institution recently suspended new enrollment of veteran students who receive the Post-9/11 GI Bill as part of a long-running dispute between Ashford, the U.S. Department of Veterans Affairs and an Iowa state regulator.