California seeks documents from Bridgepoint Education in false advertising probe

by Robert Jablon, Associated Press, San Francisco Chronicle

California asked a court to order Bridgepoint Education to turn over hundreds of thousands of records as the state investigates complaints of false advertising at for-profit colleges. The attorney general’s office filed a petition in Sacramento Superior Court contending Bridgepoint has refused to turn over most of the information sought in a January subpoena.

The information includes marketing, sales and academic documents, especially involving military veterans, foster youths and people with learning disabilities.

San Diego-based Bridgepoint had no comment, spokeswoman Marianne Perez said.

The subpoena is part of a wider investigation into complaints going back several years that for-profit schools misrepresented themselves in high-pressure sales calls to prospective students.

Officials declined to say how many schools were under investigation but said the complaints involved school class credit transfers, availability of financial aid, completion times for degrees, and graduate employment rates.

For-profit colleges have been under sharp government scrutiny and pressure for months. Critics accuse them of putting profit ahead of student achievement, noting the operations generally had higher marketing budgets but lower graduation rates than not-for-profit private and public universities.

Some graduates find that their degrees don’t win them jobs, leaving them saddled with large student debts.

Enrollments in for-profit colleges soared during the recession as job-seekers tried to improve their credentials. But that trend reversed after the federal government announced it was putting new performance criteria and rules in place.

Bridgepoint operates two schools, Ashford University in Iowa and University of the Rockies in Colorado, but more than 98 percent of its roughly 80,000 students attend classes entirely online. It has about 15,000 students in the West, mostly from California.

As with other for-profit schools, nearly all of its funding comes in the form of federal financial aid programs, such as GI Bill benefits for veterans of Iraq and Afghanistan.

Earlier this month, Ashford University won accreditation to operate in California from the Western Association of Schools and Colleges. Accreditation is crucial because it is required for a school to have access to federal financial aid.

Bridgepoint was harshly criticized for its graduation rates and marketing practices in a 2011 Senate committee hearing. The company also is under investigation by attorneys general in Iowa, North Carolina and New York.

The California attorney general’s office is seeking recordings of Bridgepoint’s telemarketing and computer information on its contacts with students and prospective students in California. The college has offered to turn over only 800 of its estimated 400,000 digitally recorded telephone calls with people in California, according to the petition.

The company contends that fully complying with the subpoena would be “unduly burdensome” and would be a “public relations disaster” because the company would have to notify students that it was turning over the information, according to the state’s petition.

State authorities disagreed. “Bridgepoint is not a ‘mom and pop’ business; it is a large, publicly traded company that generated $968 million in 2012 alone,” the petition stated.

Also, the “fear of adverse publicity is simply not a basis for non-compliance with an investigative subpoena,” the document added.