CFPB fines Bridgepoint Education Inc. for illegal student lending practices
Statement by Consumers Union on the CFPB’s Enforcement Action Penalizing Bridgepoint Education Inc. for Illegal Student Lending Practices
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) announced today that it is fining the for-profit chain Bridgepoint Education Inc., which operates Ashford University and the University of the Rockies, for misleading students into taking out private loans that ended up being costlier than advertised. In addition to assessing an $8 million fine against the company, the CFPB has ordered it to cancel all outstanding private loans and automatically refund loan payments already made by students, totaling $23.5 million in relief.
Suzanne Martindale, staff attorney for Consumers Union, the policy and mobilization arm of Consumer Reports, issued the following statement in reaction to the CFPB’s action against Bridgepoint Education Inc. today:
“Today’s announcement is another troubling example of the kind of abusive practices that seem all too common among for-profit universities. We applaud the CFPB for taking swift action to stop these illegal practices and to ensure that students who have been defrauded are provided full and automatic refunds. Similarly, we’re encouraging the Department of Education to adopt strong rules establishing a clear path for students to get their federal loans cancelled when there is well-documented evidence of fraud or other illegal practices at their school.”
The Department of Education is currently considering a proposed rule that would establish procedures for how students can get financial relief when schools break the law. Consumers Union has urged the Department to provide full and fast relief in these cases and to apply automatic group cancellation of loans when the evidence supports it.
Contact: Michael McCauley, firstname.lastname@example.org, 415-431-6747, ext 7606 (office), 415-902-9537 (cell)