Ashford University, an online division of Bridgepoint Education Inc, announced that it had entered into “a national alliance agreement” with the United States Postal Service. Under the agreement, “the USPS and its 623,000 employees will receive significant cost savings through the waiver of various fees and a prior learning credit evaluation toward their Ashford University degree program”. The USPS already has similar agreements with other online “universities”, including the University of Phoenix.

Ashford’s operating practices have been under investigation by the Department of Education’s Inspector General for “compensation policies and practices relating to enrollment advisors; calculation of returns of Title IV program funds; timeliness of returns of Title IV program funds; student authorizations to retain credit balances; disbursements of unearned Title IV program funds; and maintenance of supporting documentation for students’ leaves of absence.”

In December, in a story on risks facing for profit educators including Bridgepoint, Barron’s reported that the Department of Education was considering sanctions for “schools that run admissions offices like high-pressure telemarketing operations and overburden students with federally backed loans”. (In 2007, the most recent year reported, Ashford had a 17.4% default rate on government backed student loans).

Federal law prohibits paying so-called “enrollment advisors” on the basis of the numbers of students they enroll. During the Bush Administration, however, rules were implemented that allowed the payments to resume, effectively turning the “advisors” into salesmen working on commission. The rulemaking was hardly surprising, given that Bush’s assistant secretary for post-secondary education was a longtime University of Phoenix lobbyist). The Obama Administration has indicated that it would rescind those rules, raising questions as to how long the scholls will continue their rapid growth. That might also explain why the schools are expanding their marketing activities to include “partnerships” with organizations like the USPS.

Perhaps the most surprising fact about Ashford, though, is that despite all the talk about the new free enterprise, for profit model of higher education, in 2008, 87 percent of its revenue came, not from students, but from federal financial aid.

For more on Ashford’s recruiting practices, and an interesting perspectives on how much an Ashford degree might actually be worth, read “Marine Can’t Recall His Lessons at For-Profit College” at Bloomberg.com.

This entry was posted on Thursday, February 25th, 2010 at 9:03 am and is filed under postal. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.