A state appeals court this week upheld a multimillion-dollar penalty imposed by a judge against former San Diego-based online school Ashford University and its parent company over allegations that the school gave misleading statements to prospective students.
Nearly two years ago, San Diego Superior Court Judge Eddie Sturgeon ordered more than $22 million in penalties against Ashford and parent company Zovio Inc. and in a written ruling said the university gave "students false or misleading information about career outcomes, cost and financial aid, pace of degree programs, and transfer credits, in order to entice them to enroll at Ashford."
A three-justice panel of the 4th District Court of Appeal reduced the penalty by $1 million Tuesday, but otherwise upheld Sturgeon's ruling.
California Attorney General Rob Bonta praised the decision, which he called "a big win for consumers who trusted and invested in Ashford and believed this for-profit college would provide immense opportunity. Ashford made false promises to students about the value of an Ashford degree, leaving students with mounting debt, broken promises, and searching for a job."
The initial penalty was the result of a lawsuit filed in 2017 against Ashford and Zovio Inc. by the state of California.
Sturgeon wrote that testimony from former Ashford employees during a bench trial revealed "a high-pressure admissions department whose north star was enrollment numbers" and "a work environment permeated by fear, where closing the sale was prioritized above providing students with accurate information."
The judge also wrote that students were falsely promised that Ashford degrees could be used to secure jobs in various fields, that the school misrepresented how much financial aid they would receive, and downplayed the student loan debt they would incur.
Sturgeon wrote that students were misled as to the total costs of tuition, how long it would take to secure their degrees, and the ease with which students could transfer their credits to other universities.
Last year, the Biden administration announced that $72 million in student loans for people who enrolled in Ashford University would be wiped out.
In a statement announcing the decision, Biden said around 2,300 borrowers were "cheated" by Ashford.
The school has since been acquired by the University of Arizona and turned into the University of Arizona Global Campus.
