By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By Angelica Leicht
Bobby Ruffin Jr. was only 14 when a recruiter from Ashford University called. The Birmingham, Michigan, boy thought he'd clicked on a link promising help finding money for college. It was actually just a lead generator for the for-profit, online school's sales staff.
At the time, Bobby was an A-student. His parents had pulled him from the troubled Detroit schools, hoping that home schooling would deliver something better for their son. He told the recruiter that he wanted to be a doctor. She assured him that Ashford could be a stepping stone to that dream.
Never mind that he was only in the 8th grade.
"She said you'll be working toward a degree as a medical doctor, so when you do graduate high school you're almost there," Bobby says today. "I'm like, 'This is great, I'm going to talk to my mom.' And she's like, 'No, I wouldn't tell your parents because that would take away from the shock when it happens. If I were you I'd complete the program and when graduation comes around let them know. Mom and Dad will be super excited.'"
Admission to Ashford requires a high school diploma or equivalency. So when it came time to fill out the financial aid forms, the recruiter told Bobby to claim that he'd already graduated. He objected, but she insisted "the loan processing company will go back and correct everything." Still, he left the graduation date blank. Someone filled it in, because Ashford was soon receiving federal student loan money on his behalf.
Of course, it's illegal for kids Bobby's age to receive financial aid. But for-profit colleges haven't always been scrupulous when it comes to raiding the federal treasury. Between student aid and G.I. Bill programs, most schools receive 90 percent of their revenue from the American taxpayer. And the recruiters — often little more than salesmen paid largely by how many people they enroll — are driven mercilessly to keep those cash registers ringing.
Students don't get much in return. Though tuition rates can run as high as America's most esteemed universities, the education's generally substandard. In the end, most kids wind up walking away with a questionable degree bought at top dollar — and a mountain of debt to accompany it.
Bobby took online classes for almost a year. But when he wouldn't endorse Ashford's lying on his financial aid forms, administrators miraculously discovered that he was under 18. Since this left him ineligible for federal aid, Ashford was forced to return his loan money to the feds.
The school wouldn't be eating those costs. Bobby would. Ashford, which declined interview requests for this story, sent him a bill for $13,000.
Last fall, Bobby was finally able to enroll at a real university, Eastern Michigan, where he was named a National Collegiate Scholar. Yet he still owes Ashford. Because that's a private debt, he isn't eligible for deferments while he's in school, and any future wages could be garnished.
Unfortunately, this isn't a scam that only targets the young and naïve. The for-profit industry is so rife with deceit, it's been billed as the second coming of the mortgage loan debacle. And the same people are behind it. Three-quarters of all for-profit students are enrolled at schools owned by Wall Street banks and private equity firms
All told, they soak $30 billion a year from American taxpayers. But even in the age of slash and burn government, Congress has shown no interest in stopping it.
"The problem with the subprime [housing] scam was that it got so big it almost brought down the entire world's economy," says Barmak Nassirian, a former official with the American Association of Collegiate Registrars and Admissions Officers. "This one's wisely limited to $30 billion a year, which is highly sustainable. In the context of a multi-trillion federal budget, that's not even a rounding error."
Consumer Fraud as a Business Model
You may not know it, but you're sitting on $117,000. That's basically how much every American is potentially worth in government student aid. Want to attend grad school? Throw in another $114,000.
And as for-profit colleges have discovered, an 18-year-old with 100 large makes for a very easy mark.
In order to get in on the gravy train, a school only needs accreditation from some supposedly neutral body. But Congress neglected to say who should do that accrediting, resulting in a system loaded with charlatans. Some agencies have built sturdy reputations over decades. Others are little more than rubber stamp factories, more geared toward gobbling up members' dues than safeguarding kids.
"It never occurred to [Congress] that as billions of dollars get attached to that the recognition process, the process would get corrupted," says Nassirian. "When you say yes, you gain membership dues. After all, you're living off these dues."
Yet even bargain bin accreditation takes several years. So the titans of Wall Street found a way around this by purchasing small, failing schools to snatch up pre-owned accreditation.
Take Bridgepoint Education. Its majority stockholder is Warburg Pincus, a New York private equity firm. When it needed accreditation for Ashford University, it bought the 85-year-old Franciscan University of the Prairies, a struggling, 300-student religious college in Clinton, Iowa. Overnight, it was transformed into the online powerhouse Ashford.
Bobby is a National Collegiate Scholar who uses baby-talk: "I'm like" and "she's like" when he speaks? How is Eastern Michigan any better than Ashford?
Could be we do not have the complete story, maybe they were sued? I certainly hope so, as it is disgusting that people want to take advantage of a minor child like that!
The "Whatever" Press
Seriously? You couldn't find a lead story that even mentions Texas, much less Houston? At least it wasn't another rapper piece.
This is SO infuriating!!!! Someone should sue Ashford socks off, if they are still in business. A minor cannot sign a contract like that, and if there was forgery involved send the whole bunch to prison. The University of Phoenix does the exact same thing, and have gotten away with it for years. They tell you your credits are transferable, they are NOT transferable. They tell you an Associate Degree is transferable , it is NOT. They advertise people getting advanced degrees, most employers scoff at a degree from University of Phoenix. It is a serious FOR BIG PROFIT SCHOOL will to twist words and put a spin on them that makes them sound legit, THE ARE NOT legit! Their classes are a joke! Their teachers are a joke. I took some of their classes, but thankfully my employer was footing the bill, and I did not lose a penny. The classes/courses I took were a total waste of time! NOT one was transferrable.. The University of Phoenix LIES to the potential student. They LIE to Vets! It is a SCAM OF A UNIVERSITY!
I worked for Ashford University, it is not a good place at all.
Hey counsel? Just because the story does not mention Texas in a particular instance does not mean that the issue has no bearing on our state. The problem of for-profit "colleges" is nationwide. We have offices for some of them here in Houston. The commercials play here. Are you not paying attention?
@jesskalinowsky I was surprised that no one has sued Ashford for that. I am not a lawyer, so anyone who is knowledgable can answer that question. I was under the impression that if a contract signed by a minor is not valid.
@Carlos I am so glad to see this article and to hear from you, Carlos, I was almost (thankfully, not) taken in by the smoke and sugar blown in my face by Ashford's salespeople (er, umm, ahem!) i mean <making air-quote> "academic advisors" ... real slick bunch, hard to resist with noses that would make Pinoccio jealous.
@Hanabi-chan It's a local free press. You pretty much proved my point exactly. 1) It's old news, 2) that it has some tenuous "bearing" on the state might have been worth mentioning in the article and you still didn't understand you were validating my comments each time you went to outside sources to come up with that. The could have made the effort to come up with one of the local dupes for one of their many anecdotes just to make the effort to tie it in locally. Didn't. The author, of course, has no ties to Houston other than the Press fobbing off their writing to him.
Turn the paper over to Downing, Spivak, and Malisow.
@Hanabi-chan I agree. This can definitely be disputed in court. I wish the family the best of luck.
I just saw an ad for Ashford over the weekend. First time, aside from this article, that I heard of this place.
I think their is a Phoenix building on Space Center Blvd near Bay Area in Clear Lake. Or they are just the major tenant.