April 5, 2022
Gilbert R. Cisneros Jr.
Under Secretary of Defense for Personnel and Readiness
1400 Defense Pentagon
Washington, DC 20301
Re: Ashford University/University of Arizona Global Campus’ Voluntary Education Partnership Memorandum of Understanding with the Department of Defense
Dear Under Secretary Cisneros,
We urge the Department of Defense to immediately act to terminate its Voluntary Education Partnership Memorandum of Understanding (“MOU”) with Ashford University/University of Arizona Global Campus (“UAGC”) in light of three key facts:
- Because the school is no longer approved for VA funding, the Department of Defense (DoD) must terminate Tuition Assistance funding in accordance with section 3(b) of its MOU.
- The school is in violation of section 3(j) of its MOU with DoD, in light of the recent California Superior Court judgment[1] finding pervasive deceptive conduct and substantial misrepresentations by the school and by its agent, Zovio, Inc., which operates UAGC. The California court found that Ashford University, which was renamed UAGC in 2020, and its parent company Zovio, which provides essentially all of the services to operate UAGC, including its instruction, marketing, advertising, recruiting and admissions services, “violated the law by giving 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.”[2] Whistleblowers and students have also brought forward complaints that support the court’s findings of misrepresentations.
- The school is in violation of section 3(c) of the MOU for its failure to comply with DoD regulations regarding the use of Military Service marks, as is clear in the attached appendix.
As a result, UAGC’s MOU should be immediately terminated.
I. The MOU requires Ashford University/UAGC to be approved for VA funding, and the school is not.
Section 3(b) of the MOU between DoD and Ashford University (now known as UAGC) states that, in order to participate in the Military Tuition Assistance Program (“TA”) the school must “[b]e accredited by a national or regional accrediting agency recognized by [the Department of Education], approved for VA funding, and certified to participate in federal student aid programs through [the Department of Education] under Title IV of the Higher Education Act of 1965” (emphasis added).
It has now been widely reported and acknowledged by UAGC that, effective March 30, 2022, the school is no longer approved for VA funding. Although UAGC may become approved for VA funding in the future, no TA benefits should be distributed to Ashford University/UAGC during any time period in which the school is not eligible for GI Bill funds. This is a clear requirement in the MOU, and servicemembers and taxpayers count on The Department of Defense (DoD) to protect their interests by enforcing the MOU.
II. The school is in violation of the MOU prohibition on deceptive practices by schools and their agents.
Even if, at some point in the future, UAGC becomes approved for VA funding, DoD should still terminate the MOU with Ashford University/UAGC because there is definitive proof that the school engaged in substantial misrepresentations. In a recently-concluded court trial brought by the California Attorney General, a California Superior Court made factual findings that the school “violated the law by giving 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.”[3] The California court’s findings are further corroborated by Veterans Education Success’ record of complaints from student veterans and reports from former employee whistleblowers. Such conduct violates the MOU’s requirement in section 3(j).
Section 3(j) of the MOU states that the school must:
“Have policies in place compliant with program integrity requirements consistent with the regulations issued by ED (34 C.F.R 668.71-668.75 and 668.14) related to restrictions on misrepresentation, recruitment, and payment of incentive compensation. This applies to the educational institution itself and its agents including third party lead generators, marketing firms, or companies that own or operate the educational institution” (emphasis added).
Program integrity regulations referenced in that section prohibit a school from:
“Contract[ing] with or employ[ing] any individual, agency, or organization that has been, or whose officers or employees have been administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds”[4] (emphasis added).
“Committing substantial misrepresentations, including when the institution itself, one of its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs, marketing, advertising, recruiting or admissions services, makes a substantial misrepresentation about the nature of its educational program, its financial charges, or the employability of its graduates”[5] (emphasis added).
These prohibitions ensure that DoD protects members of the Armed Forces from schools that use misrepresentations to induce students to enroll and thereby squander their TA benefits on an education unsuitable for achieving their desired career.
Service members rely on DoD’s stamp of approval when choosing a school for their TA benefits and are understandably angry when they learn that a school that scammed them is a school DoD knew was engaged in violations of its MOU or was not approved for VA funding but nevertheless continued to be approved by DoD.
The MOU language does not require a finding by the U.S. Department of Education that a school is out of compliance with program integrity rules; instead, the MOU requires schools to “[h]ave policies in place compliant with program integrity requirements consistent with” the Education Department’s rules. The MOU requires DoD to independently protect service members and Tuition Assistance funds from schools that have practices that are not consistent with program integrity. Ashford University/UAGC has been judicially determined to have engaged in fraud.
A. Court judgment
After reviewing all of the evidence, the California Superior Court entered a judgment on March 3, 2022, against Zovio and Ashford University for engaging in misrepresentations and other deceptive practices that violated the California Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) (“UCL”) and the California False Advertising Law (Bus. & Prof. Code, § 17500 et seq.) (“FAL”).[6] Those laws prohibit “any unlawful, unfair, or fraudulent business act or practice” and are anti-fraud statutes[7] that are essentially the same as the DoD MOU program integrity requirements. The list below provides some of the deceptive conduct that was found to be in violation of the UCL and FAL, and also clearly demonstrates a lack of compliance with the DoD MOU’s prohibitions on substantial misrepresentations by the school and by its agent that operates the school:
- Zovio misled students about their ability to obtain careers that require licensure after graduating from Ashford, such as teaching, nursing, and social work. For instance, Zovio falsely promised students that their degree would allow them to become teachers, but in fact, Ashford degrees do not qualify its graduates to obtain the necessary license for most teaching positions.[8]
- Zovio lied to students about the cost of its degrees and the true amount of financial aid available to pay for the tuition, and it downplayed the amount of debt students would be taking out.[9]
- Zovio deceived students about the true pace and time commitment of Ashford’s degrees compared to other colleges. Zovio’s admissions’ staff routinely described the programs as “accelerated,” which the school admitted was inaccurate.[10]
- Zovio misrepresented the ability to transfer credits into and out of Ashford and “knew it was misleading to promise or imply credit would transfer.”[11] For example, the court found that “admissions counselors routinely made inaccurate promises that students’ prior credits or life experience would transfer before the student received an accurate evaluation from the school.”[12]
The court found that the school “did not take serious action to prevent or remedy the extensive deception their compliance program identified”[13] and created a high pressure admissions department whose north star was enrollment numbers.”[14] The school expected its admissions counselors (the same employees now working for UAGC) “to call hundreds of leads a day”[15] and “closing the sale was prioritized above providing students with accurate information.”[16] The testimony at trial made clear that “the pressure to meet their enrollment numbers, the instructions of their managers, and guidance from high performers on their teams all led [employees] to deceive students to overcome objections and promote enrollment.”[17] The judge also identified how the school’s own internal documents “demonstrate that Defendants understood the extent of the deception emanating from the admissions department” and its internal ombudsman office reported substantial misrepresentations by admissions counselors such as guaranteeing credit transfer, yet the school’s top executives refused to make changes.[18]
This is exactly the type of conduct that the prohibition on misrepresentations and deceptive conduct in the MOU was designed to prevent.
B. Ashford University and UAGC are one and the same
Although the conduct that was found to be illegal in the California Attorney General’s lawsuit occurred before Zovio subsumed Ashford University into UAGC, the schools are one and the same, and UAGC is continuing to providing an Ashford education under a different packaging that is operated by its agent, Zovio. For instance,
- Zovio replaced the name of Ashford University with UAGC, but retained the same OPEID number, marketing team and existing practices, admissions and financial aid services, existing students, incoming tuition revenue, technological infrastructure, and more.
- Zovio, as UAGC’s agent that operates the school, retained Ashford’s faculty, staff, and academic programs, despite the name change.
- Zovio, as UAGC’s agent, controls recruiting, financial aid, counseling, institutional support, information technology, and academic support services.
- Zovio even controls details like the tuition cost per credit, which it informed investors it is altering in order to attract more graduate level military students.[19]
During the California trial, Pat Ogden, the former Vice President for Accreditation Services at Ashford and UAGC, testified that Ashford University and UAGC were “the same institution under a different name.”[20] Students have also stated that the same fraudulent conduct that occurred while the school was called Ashford University continued when it was renamed UAGC. For instance, Kim Lee told the Phoenix New Times that UAGC was “essentially the same school” as Ashford University and, when the school was renamed, the only difference she noticed was that her tuition nearly doubled and the school held her diploma “ransom” until she paid her balance.
C. DoD’s MOU exists with, and was signed by, Ashford University
Perhaps most important, DoD’s MOU that Ashford University signed is the one that is still operative for UAGC. In other words, DoD has a contractual MOU with Ashford University, which the Court found guilty of defrauding service members and veterans.
D. UAGC’s contractual relationship with Zovio constitutes another violation of the MOU
The continued contractual relationship between Zovio and UAGC, in the aftermath of the court case, constitutes yet another violation of the MOU. The MOU specifically requires that UAGC have policies in place that are consistent with 34 C.F.R. 668.14, which is the Department of Education regulation setting forth requirements for schools in their agreements with the Department of Education. One aspect of that regulation prohibits schools from contracting with companies judicially determined to have committed fraud.[21] Despite the California Superior Court’s clear finding of fraud against Zovio, UAGC continues to knowingly contract with Zovio, which is an additional clear violation of section 3(j) of the MOU.
E. Military students and military-recruiting whistleblowers corroborate the California court’s findings.
Veterans Education Success has also received statements from former employee whistleblowers that corroborate the substantial misrepresentations found by the California Superior Court. In 2019, two whistleblowers spoke out on HBO’s Wyatt Cenac’s Problem Areas to describe the deception employed by sales representatives to get military-connected students, called “leads,” to enroll, as well as the unwillingness of the school to help those students once enrolled. Another employee, Eric Dean, told NBC News that Ashford pressured him to enroll veterans “no matter what” and to keep them enrolled for at least three weeks, at which point they would become ineligible for a refund. The employees felt as though they were “throwing fellow veterans under the bus” by “relating to them, gaining their trust, and taking advantage of their trust.”
Additional whistleblowers have brought complaints to Veterans Education Success, which were publicly shared with the Federal Trade Commission in our memorandum. A former corporate director, whose department reviewed the audio of enrollment advisors, documented “a voluminous record of compliance infractions” and “misrepresentations.” Two professors have also shared their concerns. One stated that academic freedom is stifled in favor of standardizing course content, that he was assigned to teach courses “outside his scope of competence,” and that professors are pressured to inflate grades and retain all students. The second professor was told to “do whatever it took to let students pass,” even “at the expense of their growth.”
Veterans Education Success has received more than 129 complaints about Ashford University and UAGC. In our analysis from February 2020, the most frequent complaint was about the accreditation and the transferability of credits. Other frequent topics included the quality of education, unexpected or unmanageable student loans, recruiting and marketing concerns, program costs, the availability of job opportunities after graduating, and a lack of student support. Two student veterans provided testimony at Department of Education negotiated rulemaking sessions earlier this year and stated:
“The bottom line is that Ashford made promises to get me to enroll at the school that did not turn out to be true. I would never have gone to Ashford if I had known that my GI Bill was not going to cover all my tuition, and that Ashford is unfriendly and unhelpful to military veterans.” – Jenica King
“Although the school told me they would provide all necessary resources for my dissertation, they have fallen short in every possible way. My school has not provided feedback on my writing, and instead, told me to hire a professional editor to review my work. Besides having access to the school library, I am practically left on my own to work on my dissertation. I was also promised a military discount which I never saw. The school kept adding charges to my account and no one would give me an explanation because there is a constant turnover in staff at the school. I currently have about 200,000 dollars in PLUS and graduate PLUS loans because of Ashford and UAGC. I feel like the school is keeping me in the program just to continue charging me tuition. Even though my school has changed names and corporate ownership twice since I started, the quality of instruction and disregard of student interests has never improved.” – Jonelle Daugherty
III.The school is out of compliance with the MOU’s requirement to comply with DoD regulatory guidance regarding the use of Military Service marks.
Section 3(c) of the MOU requires that schools “[co]mply with the regulatory guidance provided by the Department of Defense and the Services.” Further, according to the DoD Trademark Licensing Guide, “Colleges and Universities (C&U) that hold a valid Memorandum of Understanding (MOU) or other agreement with the DOD Voluntary Education Program, or with any individual Military Service under any other authority, are not exempt from the guidelines applicable to all other C&U.” Therefore, Ashford University/UAGC must comply with the DoD Trademark Licensing Guide in order to meet its obligations under the MOU.
According to the DoD Trademark Licensing Guide, “Military Service marks are not permissible as part of an NFE’s [non-federal entity’s] online presence. Military Service marks and identifiers may not be used to bolster online presence, imply DOD endorsement, or for promotional or fundraising purposes, including, but not limited to, use on associated websites and social media pages.” When specifically referring to educational institutions which have signed an MOU with DoD, the Guide further clarifies that schools may not use Military Service marks to promote their educational services on websites and social media pages.
The Guide does allow for some use of Military Service marks to honor veterans if the marks are not used to promote a school brand, such as on written programs for events to honor an individual’s military service or patriotic holidays. Additionally, part III of the guide states that “[t]he posting of an image that depicts an actual event, with an accompanying cutline that places the image in context, may be permissible” if “special scrutiny” is given to other limits on the use of DoD visual information. But UAGC’s usage of Military Service marks does not comply with these two permissible uses. Moreover, even for permissible uses of Military Service marks, the Guide requires non-federal entities to display a prominent disclaimer such as, “This activity supports the U.S. military and its veterans; however, it is not officially connected to or endorsed by the U.S. Department of Defense or any of its branches.”[22]
According to the Guide, Military Service marks are those that include emblems, coats of arms, initials, symbols and other military identifiers. In a December 2021 review of UAGC’s social media pages, Veterans Education Success found 17 posts using Military Service marks (see Appendix B). Sixteen of the posts impermissibly bolstered the school’s online presence, and one displayed an actual event but failed to include the required disclaimer (see Appendix B, page 23).
While UAGC is certainly welcome to highlight the achievements of its student veterans, it is violating the MOU by impermissibly using Military Service marks. In addition to bolstering the school’s online presence, the fact that these posts are used in conjunction with advertisements for the school featuring actors in generic military uniforms suggests that the purpose of these posts is to advertise and promote the school to service members and veterans.
UAGC has repeatedly violated DoD guidelines on the use of Military Service marks and is therefore not in compliance with its MOU.
The appendix provides a chart identifying the features of each UAGC post. Images are also attached in the appendix.
IV. DoD should withdraw TA benefits.
DoD must immediately act to protect TA funds and service members now that the school has lost GI Bill eligibility. Even if UAGC is able to renew GI Bill funding, the Department of Defense must not tolerate abuses of its MOU sections 3(j) and 3(c). Service members count on the Department of Defense to protect their interests through the terms of the MOU, which were designed to protect service members. And taxpayers count on the Department of Defense not to waste an estimated $25 million each year on Tuition Assistance funds to a school that violates the terms of the MOU.
The recent California Superior Court judgment finding pervasive substantial misrepresentations and other deceptive conduct by the school and its agent that operates the institution puts the school in violation of the MOU. There is definitive proof that the school engaged in substantial misrepresentations in light of the California Superior Court’s factual findings that the school “violated the law by giving 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.”[23] Such conduct violates the MOU’s requirement in section 3(j).
Separately, the school’s violations of the MOU’s prohibitions on the misuse of Military Service marks in section 3(c), is a serious violation in and of itself. Unauthorized private use – for financial gain – of Military Service marks must be strictly policed by the Department of Defense and must never be tolerated – particularly by schools that voluntarily sign an MOU with DoD pledging to abide by DoD regulations and rules.
We respectfully request that DoD take immediate action to terminate its MOU with UAGC and prohibit it from current and future access to TA benefits.
Sincerely,
Carrie Wofford
CC: Arizona Department of Veterans Services, State Approving Agency
U.S. Department of Veterans Affairs
U.S. Department of Education
WASC-Senior College and University Commission
[1] People of the State of California v. Ashford University, et.al., 37-2018-00046134-CU-MC-CTL, Statement of Decision (hereinafter, “Order”), filed March 3, 2022, available at https://oag.ca.gov/system/files/attachments/press-docs/37-2018-00046134-CU-MC-CTL_ROA-696_03-03-22_Statement_of_Decision_1646669688827.pdf
[2] Id. p. 8.
[3] Order p. 8.
[4] 34 C.F.R. 668.14(b)(18)(iii)(B).
[5] 34 C.F.R. 668.71-74.
[6] See generally, Order.
[7] Id. pp. 13, 38.
[8] Order pp. 17-20.
[9] Id. pp. 20-24.
[10] Id. pp. 24-25.
[11] Id. p. 26.
[12] Id. pp. 25-26.
[13] Id. p. 37.
[14] Id. p. 10.
[15] Id.
[16] Id. p. 11.
[17] Id. p. 12.
[18] Id. pp. 28-29.
[19] October 27, 2021 Zovio, Inc. Third Quarter earnings call.
[20] See Closing Argument (p. 9) by California Attorney General’s Office, citing testimony at trial. Veterans Education Success is in possession of transcripts from the trial and can provide them upon request.
[21] 34 C.F.R. 668.14(b)(18)(iii)(B).
[22] DoD Trademark Licensing Guide, Part I.
[23] Order p. 8.