Published Justice Project Gets Precedential Victory in Case Against Deceptive Online University

March 21, 2024

The Center successfully advocated for the California Court of Appeal to publish its recent decision in People v. Ashford University. The previously unpublished opinion is now citable and provides future courts and litigants guidance in determining civil penalties in public prosecutions. 

The facts in Ashford involve one of the most pressing consumer issues of our time: student loans taken out for illegitimate and deceptive educational programs. The story is an all-too-common one. Ashford University, a privately-owned online institution, created a high-pressure admissions department that prioritized enrollment numbers over truthful advising. Admissions advisors, fearful of losing their jobs, made deceptive statements to get prospective students to enroll. In turn, those students––primarily low-income students––took out federal loans to pay the $40,000-$60,000 Ashford tuition. When Ashford’s promises proved to be empty, many students defaulted on those loans. In 2017, the Attorney General filed an enforcement action against Ashford for its violations of the Unfair Competition Law (UCL) and False Advertising Law (FAL), and the trial court awarded over $22 million in penalties. 

When the case reached the court of appeal, Ashford’s liability was not contested. Instead, the opinion focused exclusively on the consideration of an often underanalyzed but critical issue: civil penalties in public prosecutions. Few opinions deciding public prosecutions are ever published, since not many such cases are filed and only rarely are those brought to trial. In the 74-page opinion, the court of appeal describes in detail how a trial court should determine the appropriate amount of civil penalties under the UCL and FAL. The court ultimately affirmed a modified judgment for over $21 million in penalties. 

The court strongly condemned Ashford’s conduct: “The nature of defendants’ misrepresentations, the overwhelming number of violations, and the length of time over which they were committed, all indicate a serious level of culpability.” The now-published opinion provides a note of warning to for-profit online colleges set up to attract federal student loan dollars and provide little but debt and disappointment in return. It also offers a beacon of hope to the myriad students who have been swindled by these schools, sending the welcome message that redress is possible.