Bridgepoint Education, a for-profit college chain that told students they could pay off student loans for as little as $25 a month, is being required to discharge all outstanding private loans the institution made and refund loan payments already made by borrowers.
Loan forgiveness and refunds will total more than $23.5 million. Bridgepoint must also pay an $8 million civil penalty to the Consumer Financial Protection Bureau.
“Bridgepoint deceived its students into taking out loans that cost more than advertised, and so we are ordering full relief of all loans made by the school,” said Richard Cordray, director of the bureau.
Bridgepoint operates Ashford University and the University of the Rockies, two for-profit colleges that have enrolled hundreds of thousands of students in the last few years, most of whom take courses online.
From 2009 to 2013, Bridgepoint offered private student loans to its students to help cover the cost of tuition. It loaned more than $24 million, collecting about $5 million in principal and interest from the loans. About $19 million is outstanding.
Bridgepoint must require all students to use the bureau’s financial aid disclosure tool when they borrow money to pay for school. It provides information on loans, grants, graduation rates, loan defaults, potential salaries for their programs, and post-graduation budgeting.
Bridgepoint also must contact credit bureaus to remove any negative information from borrowers’ credit reports about outstanding private student loan debt owed to the school.
