On Tuesday, Blue Shield of California announced a new partnership with California-based for-profit education provider Zovio — a deal that offers employees of the non-profit health insurance company opportunities to attend Ashford University, a college formerly owned by, and now serviced by, Zovio.

According to a press release, under the deal “full-time Blue Shield employees who have been employed for six months can obtain free associate, bachelor’s or master’s degrees at Ashford University without taking out student loans or incurring additional tuition expenses.” Also, “immediate family members of Blue Shield of California employees can also enroll in Ashford University degree programs at a discounted tuition rate.”

The release quotes Blue Shield of California Chief Human Resources Officer Mary O’Hara as saying that “a great next step” in the health insurer’s efforts to help its employees learn and grow “is our collaboration with Ashford, which gives our employees access to free online higher education that can advance their capabilities, careers, and professional goals.”

It sounds like a nice arrangement. Except that Ashford University is currently being sued by California’s attorney general, Xavier Becerra, for defrauding and deceiving students.

California’s lawsuit, filed in 2017, alleges rampant unfair and fraudulent business practices at Ashford. The lawsuit claims Ashford’s recruiters were fueled by a “boiler room” culture that demanded they meet enrollment quotas. The recruiters, in turn, allegedly told prospective students, among other untruths, that federal financial aid would cover all of their costs.

When he filed the suit, Becerra said in a statement, “Ashford University preyed on veterans and people of modest means. This for-profit college illegally misled students about their educational prospects and unfairly saddled them with debt.”

Ashford denies the charges; the case is still pending. But that lawsuit is one of many federal and state law enforcement actions or investigations against Ashford in recent years.

Why would Blue Shield sign a deal to send its own employees to such a school?

Ashford and Zovio, previously called Bridgepoint Education, have a long record of deceiving, overcharging, and abusing students, taking in billions in student grants and loans paid for by U.S. taxpayers, while leaving graduates and dropouts alike with crushing debt.

After conducting a hearing on the school in 2011, then-Senator Tom Harkin (D-IA) declared Ashford “a scam, an absolute scam … premised on aggressively recruiting largely low-income, disadvantaged students … collecting their federal grants and loans even as the vast majority of students drop out … and lavishly rewarding executives and shareholders with mostly taxpayer dollars.”

Senator Harkin’s subsequent report on the for-profit college industry found that Bridgepoint spent 29.7 percent of its revenue — $211.6 million — on marketing and recruiting, a higher proportion than any other publicly traded education company, and more than twice what the company spent on teaching students.

Andrew S. Clark founded Bridgepoint Education in 2003. The company paid him $4.72 million in 2018. That wasn’t his best year; in 2009, his total compensation was $20,532,304.

In May 2014, Bridgepoint agreed to pay $7.25 million to settle claims by Iowa’s Attorney General that the company violated the state’s Consumer Fraud Act by making false and misleading statements to prospective students and using high-pressure sales tactics.

In 2016 Bridgepoint disclosed that the U.S. Justice Department had served the company with a civil investigation demand aimed at determining whether it misrepresented its revenue from private student loans and thus its compliance with the federal 90/10 rule, which requires for-profit colleges to get at least 10 percent of their revenue from sources other than the U.S. Department of Education.

Bridgepoint/Zovio also has been under investigation by the Securities and Exchange Commission and the Consumer Financial Protection Bureau.

Earlier this month, the Trump Administration, which has consistently acted to aid predatory colleges and limit protections for students, stepped in to certify Ashford’s eligibility to receive GI Bill benefits, after California’s veterans education agency repeatedly declined to do so, citing pending lawsuits charging that Ashford used erroneous, deceptive, and misleading advertising to attract veterans. The Trump VA move to overrule California’s veterans agency outraged veterans organizations and other critics of Ashford.

While some other giant for-profit college corporations — Corinthian, ITT Tech, EDMC — have collapsed in recent years after allegations of fraud, Zovio has carried on, with Ashford receiving $362 million in taxpayer-funded Department of Education aid, and $448 million in total revenue, during 2017-18 (and Zovio’s other school, University of the Rockies, getting another $16 million in federal aid). On a call with investors last week, Zovio CEO Clark reported a quarterly loss of $23 million on revenue of $96.3 million, as enrollment has declined, but the company continues to bring in millions in taxpayer dollars every month.

One of Trump education secretary Betsy DeVos’s top higher education aides, Robert Eitel, was previously a senior executive at Bridgepoint. But last fall even the DeVos education department showed concern about an action taken by Zovio — its plan to spin off Ashford into a non-profit university, while for-profit Zovio would retain a lucrative contract to provide a range of services to the school. A number of for-profit colleges have undertaken such questionable conversions to non-profit status, allowing them to escape the stigma and certain regulations attached to for-profit schools, while continuing to get rich off students and taxpayers. DeVos’s department said that in order to approve the non-profit conversion, Zovio would be required to post a $103 million irrevocable letter of credit — equalling about 25 percent the school’s annual federal aid —  as a way to protect taxpayers and students in the event Ashford collapsed.

I’ve published several articles questioning these kinds of partnerships between large employers and for-profit colleges with records of predatory practices, most recently about a troubling deal between Zovio and Delta Airlines.

It’s not clear why so many big employers direct their workers to predatory schools that could ruin these employees’ financial futures. Perhaps it’s just the easiest way for time-pressed HR managers to check the box of providing education benefits, because for-profit schools aggressively push their programs and most other schools don’t bother. Perhaps — although I have no proof– the for-profit schools shower HR staff with trinkets, junkets, or other soft or hard inducements. Or maybe — though, again, I haven’t seen any proof — some for-profit schools pay companies finder fees for steering employees to the schools, something that would be a severe breach of trust by the employers.

It’s also possible that some of these employers are actually paying for-profit schools for employee tuition. (Not all for-profit programs are bad for students; some provide quality education and others are at least a reasonably-priced way to enhance a resume.) Such arrangements can help for-profit colleges to meet the federal requirement that they receive no more than 90 percent of their revenue from Department of Education grants and loans; another way is to aggressively recruit veterans and military service members, who are eligible for VA and Pentagon financial aid. Ashford has come close to the 90-10 line in the past, but it now claims it no longer faces such risks, and as a newly-minted non-profit, Ashford will no longer have to face that requirement anyway.

I contacted Blue Shield and Zovio to learn more about the new deal, including whether Blue Shield would be using some of its revenues, which largely come from insurance premiums paid by California workers and businesses, to pay Ashford and Zovio for tuition costs; whether, instead, Zovio will be compensating Blue Shield in some respect for the arrangement; and whether Blue Shield had concerns about steering its employees to a school that has repeatedly been charged with fraud and deception. Neither company has responded.