Over 6,000 veterans attending Ashford University may find their school no longer approved for GI Bill benefits after June 30, 2016. The state of Iowa will be withdrawing its approval for GI Bill benefits after that date.
Ashford is attempting to gain approval for its programs from the state of California before the Iowa approval runs out. This would keep GI Bill benefits flowing to enrolled students. However, Bridgepoint Education, the parent company of Ashford is currently under investigation by the California Attorney General for the company's scholarship and institutional loan programs and other extensions of credit made by Bridgepoint to students, as well as enrollment and retention details. Ashford joins the growing list of for-profit universities under investigation by state and federal authorities which includes DeVry University, the University of Phoenix, ITT Tech, and Corinthian Colleges.
Bridgepoint is also facing two federal subpoenas from the U.S. Securities and Exchange Commission related to the California investigation and a Consumer Finance Protection Bureau investigation.
The Department of Veterans Affairs does not approve schools for GI Bill benefits, instead it relies on an arcane process of having individual states approve "programs of education". The VA will approve each program based on the state's input. Theoretically a school could have a sociology program approved for GI Bill benefits, while a calculus program would not be approved, although this rarely happens. This process of the federal government relying on the states to do the investigative and administrative work dates back to the days before nationwide for-profit chains offered internet based degrees.
The Iowa State Approving Agency's withdrawal of Ashford's GI Bill approval comes as a result of the closing of Ashford's physical campus in Clinton, IA. About 1 percent of Ashford's 42,000 students attended the physical campus in Clinton. The Iowa campus was bought by Ashford in 2005, it had been in operation since 1893 when it began as Mount St. Clare Academy, a female only institution. Ashford announced last July that the Clinton campus would close because it had been unable to attract enough students to make up for a "significant and ongoing enrollment shortfall." The campus's final commencement on May 9 had about 200 students.
Since Iowa has withdrawn its approval of Ashford University, the school must now seek approval in another state where it has a campus or offices. Bridgepoint Education, Ashford's parent company has its headquarters in San Diego.
Students currently drawing GI Bill benefits to attend Ashford will not be affected until their present term ends. The company said in a statement that "Those students whose period of enrollment begins on or before June 30, 2016 will continue to receive GI Bill benefits until the completion of the student's term. At this time we cannot be certain that approval through the California State Approving Agency will be obtained by June 30, 2016, and any potential delays or gaps in coverage for GI Bill benefits, including as a result of following the [Iowa State Approving Agency's] recommendation to seek approval elsewhere, could have a material adverse effect on current and future military student enrollment."