A civil division of the U.S. Department of Justice is investigating Tiffin University and Altius Education Inc. to determine if Ivy Bridge College—an online college they ran under a joint venture—violated federal student-aid rules.
News of the investigation comes just weeks after Tiffin's accreditor ordered the university to halt new enrollments at Ivy Bridge, an associate-degree program designed to serve working adults that has been recognized as an innovative model by the Bill & Melinda Gates Foundation and other organizations. More than 90 percent of the program's students received Pell Grants.
The accreditor, the Higher Learning Commission of the North Central Association of Colleges and Schools, has also ordered Tiffin to sever its ties with Altius by September 30.
The federal investigators have advised the university and the company that the inquiry is part of a False Claims Act investigation that could cover Ivy Bridge's student-recruiting practices, academic-integrity issues, and student-loan policies, as well as the corporate relationship between Altius and Tiffin. The Department of Justice's four-page letter outlining the inquiry, which was reviewed by The Chronicle, also seeks information on the degree to which Tiffin or Altius oversaw marketing, enrollment, and academic activities at Ivy Bridge since its beginnings, in 2008.
The investigation's focus on questions of oversight echoes concerns raised by Tiffin's accreditor in a May 22 "Staff Summary Report," which asserted that Tiffin's oversight of Ivy Bridge "is nominal at best" and described Tiffin's arrangement with Altius as "an apparent sale of accreditation to another entity."
Tiffin and Altius officials dispute that. They say that the university always maintained control over all academic matters at Ivy Bridge, and Tiffin has told the commission that the joint venture was little different from the arrangements that numerous other colleges have made with outside companies to help develop their online-education programs.
The Justice Department's letter says the investigation also covers Tiffin's president, Paul Marion; Altius's founder and chief executive, Paul Freedman; a company that Ivy Bridge used for a while to assist it in student recruiting, Education Sales and Marketing; the chairman of Tiffin's Board of Trustees, Gary Heminger; and a former director of enrollment management at Tiffin, Cam Cruickshank.
Investigations under the False Claims Act can be prompted by whistle-blower lawsuits, filed under court seal, that allege misuse of federal funds, or they can be opened by government agencies themselves. Neither Mr. Marion nor Mr. Freedman said they knew what had prompted this investigation.
Mr. Marion said Tiffin is happy to cooperate with the investigation. "We look forward to the opportunity to share whatever information is requested in order to demonstrate that Ivy Bridge College has operated with high levels of integrity and within all rules and regulations required," he said in an interview on Wednesday. "We feel very confident that everything that we've done was appropriate and met federal financial-aid guidelines and every other kind of standard."
Mr. Freedman, who has said the Higher Learning Commission has unfairly taken aim at Ivy Bridge and Altius, said he expected that the scrutiny would help prove that his company had done nothing wrong. "I want more eyes on what happened rather than fewer," he said.