Vets group sounds the alarm after VA greenlights controversial Ashford University for GI Bill funds

By STEVE BEYNON | STARS AND STRIPES Published: February 21, 2020

WASHINGTON — The Department of Veterans Affairs agreed to preserve Ashford University’s eligibility to receive GI Bill benefits after years of whistleblowers, veterans, and state officials sounding the alarm over the school’s alleged predatory habits aimed at veterans. 

Ashford, which is based in San Diego, is a primarily online university that has a long history of battling to hold on to its access to tens of millions of dollars in GI Bill funds —  a key source of revenue for the school. Veterans Education Success, an advocacy group primarily for student veterans, said the VA is violating the law for approving federal benefits to be used at a school that “engaged in deceptive advertising or recruiting.” 

"It is outrageous that VA continues to violate federal law in order to help for-profit colleges while throwing veterans under the bus," Carrie Wofford, president of Veterans Education Success, said in a prepared statement. "Veterans have legal rights to be protected from fraud and VA has a legal obligation to stop funding that fraud — but VA keeps refusing to follow the law."

Most states have an authority that approves a school’s qualifications for eligibility to receive GI Bill funds. However, in October, VA pulled California’s oversight of military education benefits after a long dispute over how to regulate for-profit schools. Since 2017, VA also has acted as the eligibility authority for schools in six other states, according to the department. 

In 2017, California’s attorney general sued Ashford for defrauding and deceiving students.

“Ashford University preyed on veterans and people of modest means,” Attorney General Xavier Becerra said in a statement. “This for-profit college illegally misled students about their educational prospects and unfairly saddled them with debt.” 

VA approved all but 20 of Ashford’s programs, which were either in the process of being voluntarily discontinued by the university or failed to meet requirements for approval, according to the department. The school has 91 programs, and the 20 unapproved programs failed to satisfy at least one of two provisions, VA said.

“One provision requires both accredited and non-accredited programs that are designed to prepare an individual for licensure or certification to meet state requirements in order to be approved for purposes of VA education benefits. The second provision requires programs offered by non-accredited and for-profit schools to be consistent in curriculum and content with similar programs offered by public and private, not-for-profit, schools in the state,” VA spokeswoman Susan Carter wrote in an email.

The Ashford programs not approved by the VA include a Bachelor of Arts in early childhood education, a master’s degree in public health, and a Master of Arts in special education. 

“The 20 programs that were not approved by the VA do not represent a significant number of students and will not result in a material impact to Ashford's total enrollment,” according to a news release from Zovio, the company that owns Ashford. Zovio did not respond to a request for additional comments. 

In 1974, Congress banned the GI Bill from being used at schools that relied on misleading advertising and recruiting to enroll veterans. In 2018, Ashford received more than $27 million in Post-9/11 GI Bill revenue, according to VA data, with nearly 7,000 student veterans enrolled, making the university the sixth-largest recipient of GI Bill funds in the country. 

Wofford said for-profit colleges target veterans largely because of the so-called “90/10 loophole.” The 90/10 rule requires that for a for-profit school to be eligible to receive federal student assistance, it must find at least 10% of its revenue from sources other than federal aid. The idea being legitimate for-profit schools should be able to recruit students willing to pay out of their own pockets and taxpayers wouldn’t be propping up failing schools. However, the GI Bill does not count towards this federal aid limit, despite those dollars coming from federal funding. 

“One thing that's terrible for veterans and service members is that they are targeted for fraud and deception because of a loophole in federal law. We're working hard to close this loophole in Congress,” Wofford said. “Right now, the loophole incentivizes for-profit colleges to see veterans as nothing more than dollar signs in uniform because the colleges count GI Bill funds and military funds as private revenue to offset the cap on federal funds the schools otherwise face."

Zovio said in its news release that Ashford’s revenue is below the 90/10 rate. 

A 2018 audit from the VA inspector general found roughly 11,200 students using GI Bill benefits will enroll in programs that violate VA standards, costing the federal government about $585 million in improper payments per year. The bulk of that money goes to for-profit colleges. The inspector general estimates those figures could balloon to 17,000 students and $2.3 billion in five years, if nothing changes. 

The aggressive recruiting practices at some for-profit colleges, including Ashford, has also prompted years of congressional investigations. A 2012 Senate investigation found Ashford University routinely told veterans their GI Bill would fully cover the cost of tuition. At least one veteran owed $11,000 that his federal benefits wouldn’t cover, the investigation found.

“The pressure we put on these students to get their VA documents completed was crucial to Ashford’s retainment strategy,” Eric Dean, a former Ashford recruiter and Navy veteran, said last year at a House Committee on Veterans’ Affairs hearing. “The money from the GI Bill is crucial to the survival of for-profit universities. The GI Bill money is key to the structure of places like Ashford. They need it to survive, which means they have to target veterans to keep their shareholders happy. Again, this is all about putting profit above education.”

In 2011, the Senate Committee on Health, Education, Labor and Pensions heard testimony from Arlie Thoreson Willems, a retired administrator of the Iowa Department of Education. Willems testified she and her colleagues regularly received calls from across the country about Ashford graduates’ lack of eligibility to obtain a teaching credential in their state, many of them from students who were misled by Ashford’s recruiters regarding that eligibility, forcing students to start over their college education in their home state.

In 2016, Ashford lost its approval for GI Bill funds in Iowa, but later sued the state and lost in 2017. Due to Ashford losing its credentials in Iowa, a veteran attending the school found out right before his graduation that he would not earn his teaching license. He was told he would have to attend a “cooperating school” in Arizona for one year, according to the 2012 Senate report. 

When the school failed to secure approval in California, it relocated to Arizona in 2017. The school offered no courses in Arizona, but signed a lease for a 2,454 square foot space and called it a headquarters, according to The Chronical for Higher Education, which reports on the industry. The VA gave Ashford 60 days to obtain approval from California, back when the state was the approving authority. The state again declined to approve Ashford, citing the school's entanglement in legal issues alleging it used "erroneous, deceptive, or misleading advertising policies." In 2019, Washington state booted Ashford from operating in the state. 

"Ashford University if not permitted to engage in any actions that constitute 'operating' in Washington state," Sam Loftin, director of consumer protection said in a statement. "[This includes] engaging in targeted advertising, promoting, publicizing, soliciting, or recruiting for the institution. Students enrolled in field placements for the current term may complete their field placement experience, but no future field placements may be offered." 

Twitter: @StevenBeynon