Ashford University veteran-students caught in bureaucracy battle

Veterans enrolled in an online university are caught in an escalating dispute involving the school, the Department of Veterans Affairs and state regulators in what school officials say is a campaign by Obama administration holdovers in Washington and their liberal allies to undermine for-profit universities.

Ashford University announced this month that it was temporarily suspending enrollment of veterans who receive tuition benefits under the Post-9/11 GI Bill. The school took action after the VA, in a reversal, told Ashford that it lacked sufficient approval for its online programs from regulators in Arizona.

The VA announced that it will suspend Ashford’s eligibility for GI Bill tuition payments and approval of student enrollments and re-enrollments within 60 days unless the university takes “corrective action.” That could disrupt the education of more than 10,000 veterans and active-duty military students among Ashford’s overall enrollment of more than 40,000 by early January.

Officials at Bridgepoint Education, the publicly traded parent company of Ashford, say the VA has overstepped its authority on an issue that legally should be left to states.

“We vigorously disagree with their interpretation, as Congress clearly delegates approval to the states in these matters,” said Vickie Schray, Bridgepoint’s executive vice president of regulatory affairs and public policy. “We have students who are close to graduation who would not be allowed to complete their degree. Our students would lose credits, lose time, lose money and in many instances would be forced to go somewhere else and start over, even though their choice is to attend Ashford.”

Ashford filed a motion in federal court last week against VA Secretary David J. Shulkin seeking to overturn the agency’s action, essentially accusing the VA of making law arbitrarily.

“VA will have imposed new rules governing the approval of educational institutions without taking even a single step” required by federal law governing agencies that impose binding regulations, the school’s complaint states. The petition also says the VA’s action would be “permanently damaging to the university.”

Critics say Ashford, the subject of three state attorney general investigations and a probe by the Securities and Exchange Commission, has used overly aggressive recruiting tactics to enroll veterans and has misled students about the quality of its programs.

Detractors also say schools such as Ashford rely too heavily on veteran-students so they can skirt a law that prohibits for-profit colleges from receiving more than 90 percent of their revenue from federal student aid funding. Tuition benefits under the GI Bill and Department of Defense’s tuition assistance program are not subject to the 90/10 cap.

Last year, Ashford enrolled a total of 7,935 students online using $37.8 million in GI Bill benefits, according to a Military Times analysis of federal data.

The VA places blame for the dispute on Ashford officials.

“This situation is entirely the fault of Ashford University leaders, who did not address VA’s multiple requests that they become compliant with the law,” said VA spokesman Curt Cashour.

Location, location, location

The case has been building since the spring of 2016, when a state agency in Iowa notified Ashford that its online degree programs would no longer be able to enroll veterans. Ashford decided in July 2015 to close its facility in Clinton, Iowa, where it had a small campus and administrative center.

Iowa’s decision would affect Ashford’s students who are veterans or active-duty military nationwide, unless the school could obtain approval in another state.

In July 2016, the Arizona Department of Veterans’ Services approved Ashford, although VA officials objected that the school’s rental space in Phoenix wasn’t a primary bricks-and-mortar campus. Bridgeport’s administrative headquarters is in San Diego, where it also applied for approval but then withdrew the effort.

The VA initially authorized Ashford’s eligibility for GI Bill tuition payments under Arizona’s auspices but announced on Nov. 9 that Arizona’s approval “is legally insufficient because the Arizona [Veterans’ Services Department] lacks jurisdiction to approve Ashford.”

“The legal authority to approve Ashford rests solely with the [approving agency] of the state where Ashford’s main campus is located,” the VA said. “It does not appear to VA that Ashford’s main campus is located in Arizona.”

Ashford officials say the VA’s action reveals a bias shared by Washington bureaucrats, liberal lawmakers and their allies in teachers unions and traditional schools with a physical “main campus” — a view that online schools are inferior. They say for-profit schools are threatening a key pillar of Democratic Party power.

In a company statement, Bridgepoint said the presidential election of Barack Obama in 2008 ushered in an era of persecution that included Democratic lawmakers such as Sens. Dianne Feinstein and Barbara Boxer of California and Richard J. Durbin of Illinois exerting pressure on state regulators in Iowa and California not to authorize Ashford University’s eligibility for GI Bill tuition.

“Liberal state institutions appealed to friends like Senators Boxer, Feinstein and Durbin, as well as California’s Attorney General, to withdraw Iowa’s longstanding approval of students’ eligibility to use GI Bill benefits to pursue their education at Ashford University,” the company said. “At the same time, the federal Department of Veterans Affairs made it its mission to eliminate proprietary schools as an option for veterans. All of this was done under the guise of consumer protection, but in reality it was a campaign to protect private non-profit and public institutions — and the labor unions that populate them — from competitors who were steadily taking market share away from them.”

Settling grievances

Bridgepoint also contends that certain VA officials are holdovers from the Obama administration and are continuing to carry out a campaign against Ashford.

“From the beginning of this process, it has been clear that certain officials who objected to non-traditional institutions like Ashford were set on abusing their regulatory authority to disrupt our teaching, damage our reputation, and demoralize our students,” said Bridgepoint CEO Andrew S. Clark. “Our veterans expect and deserve better.”

One of the VA officials, Curtis Coy, deputy undersecretary for economic opportunity of the Veterans Benefits Administration, told 4,500 Ashford students in an email this fall that they no longer qualified for GI Bill tuition “based on changes to Ashford’s resident programs last year.”

In response, Ashford President and CEO Craig Swenson sent messages to students saying the VA was providing them with misinformation and encouraging them to contact the White House’s new veterans’ complaint hotline to voice their concerns.

Mr. Cashour, the VA spokesman, said Mr. Coy is not a political appointee (he started his first government job during the Clinton administration) and that the agency is not targeting for-profit schools.

“There have been other online schools that VA discovered had essentially the same problem as Ashford and had to seek approval in a different state,” Mr. Cashour said. “Those schools simply took the necessary steps to seek the proper approval and resolved their situations in a few weeks or months without causing any undue burden on their veteran students.”

He added, “There are no Obama political appointees working at the Veterans Benefits Administration.”

Veterans Education Support has issued reports raising questions about Ashford’s operations and saying it has received 114 student complaints about Ashford. Bridgepoint officials question the independence of the nonprofit group, pointing out that several of its officials are former Democratic congressional staffers.

A Veterans Education Support report noted that the Iowa attorney general reached a $7.25 million settlement with Ashford in 2014 over claims that the school’s marketers misled prospective students about how quickly or easily its early education degree could lead to a classroom teaching position.

In a statement at the time, then-state Attorney General Tom Miller said an investigation found “what we allege was troubling conduct by Ashford recruiters, including misleading prospective students to encourage them to sign on the dotted line.”

“Unfortunately for many Ashford students, they didn’t get the degree they hoped for or the job they were led to believe they’d get after graduating,” he said. “What they did end up with was a crushing amount of student loan debt.”

In agreeing to the settlement, Ashford did not admit to wrongdoing.

In the current federal court case, Bridgepoint officials say Ashford’s students face “an unpalatable set of choices” if the VA’s action is not overturned.

“If they choose to stay at Ashford, they will have to pursue their programs of study at their own expense, without the tuition assistance and housing allowances that these veterans have earned and inarguably deserve,” the school’s petition states. “Second, they can switch to another institution that they would not otherwise have selected, but if so they may lose credits that cannot be transferred, be forced to pursue a different course of study, or suffer a partial loss of benefits. The third option, which at least some veteran students would no doubt select, would be to pause or end their studies if they cannot use GI Bill benefits at Ashford, the school of their choice.”