A recent press release from the Consumer Financial Protection Bureau doesn't represent the actual allegations to which a for-profit education company has settled, a Philadelphia attorney says.

On September 12 the CFPB announced it had entered into a consent order with Bridgepoint Education, Inc. This for-profit, post-secondary education company is based in San Diego, and does business as Ashford University and the University of the Rockies.

An investigation conducted by the CFPB, California Attorney General Kamala Harris, and the Department of Education led to allegations that Bridgepoint deceived students into taking out private student loans that ended up costing more than what was advertised by the college.

The resulting consent order requires Bridgepoint to discharge all outstanding private loans it made to students and to refund loan payments made by borrowers. In addition to more than $23.5 million in loan forgiveness and refunds, Bridgepoint must also pay an $8 million civil penalty to the CFPB.

John L. Culhane Jr., an attorney and partner with Ballard Spahr LLP, said the amount of the penalty seems excessive.

"It's always hard to assess [the amount of the penalties] because the CFPB has said very little about how it determines the amount of any civil money penalty," he said.

"As is often the case with the CFPB, the press release doesn't line up with the allegations in the consent order. The press release implies that Bridgepoint deceived all of its student borrowers.

"The consent order doesn't allege that the oral payment representations were made all of the time, or even most of the time. It doesn't even allege that any students relied on the representations. It only asserts that these oral representations happened 'many' times and that 'many' students ended up making payments in excess of $25."

Culhane also emphasized that the CFPB's consent order did not allege that Bridgepoint failed to provide truth-in-lending disclosure statements for the Bridgepoint loans, "so all of those students would have received a disclosure of their payment schedule before signing their loan documents," he said.