Facts

Zovio, Inc. operated Ashford University as an online for-profit school with more than 80,000 students at its peak. Ashford would enroll students, many of them older than the average college student, minority, and low income, through trained admissions counselors. Ashford generated hundreds of millions of dollars for Zovio annually, mostly from Title IV loans, income-based grants, and GI Bill funds. The People sought an injunction, restitution, and civil penalties pursuant to the Business and Professions Code.

PLAINTIFFS' CONTENTIONS: Plaintiff contended that Defendants misled students in violation of Unfair Competition Law and False Advertising Law. Plaintiff alleged that Ashford counselors repeatedly made misrepresentations to students about career outcomes, the cost of the degree, financial aid availability, ability to transfer credits, and the pace of the degree. They also alleged that Defendants maintained a high-pressure admissions department whose focus was on admissions numbers rather than truthful advising. Plaintiff further alleged that Defendants' debt collection practices violated the law. Plaintiff sought $75,000,000 in civil penalties, $25,000,000 in restitution, and broad injunctive relief.

DEFENDANTS' CONTENTIONS: Defendants contended they complied with and exceeded all relevant business standards, evidenced by the fact they had achieved regional accreditation and faced oversight through settlements with the Iowa Attorney General and Consumer Financial Protection Bureau--the requirements of these settlements overlapped and covered Plaintiff's allegations in the present suit. They also asserted the existence of their robust compliance program and their internal policies established a good faith defense.

Result

The court found in favor of plaintiff and ordered defendants to pay $22,375,782 in civil penalties for misleading students to entice them to enroll at Ashford. The court ruled that plaintiff would not be entitled to any relief related to Zovio's alleged debt collection practices, denied plaintiff's request for restitution to students, and refused the request for injunctive relief in its entirety.