Across the country in San Francisco that same day, Paul Freedman, the founder of a company that had won a grant funded by the Gates Foundation to do roughly what the president described, got a FedEx package from the federal government.

This was not a letter of commendation. It was a notice from President Obama’s Department of Justice that his company, Altius Education, is under federal investigation. The notice was the culmination of a more than two-year battle between Altius and the Higher Learning Commission, one of two members of the 118-year-old North Central Association of Colleges and Schools, which controls accreditation — the vital credential that gives college degrees value — for over 1,000 colleges and universities in 19 states. The HLC’s university backers have an obvious interest in avoiding the sort of low-cost competition that reformers, and now the president, seek. And commission documents that have not been released publicly, but were provided to BuzzFeed by Altius, paint a picture of a regulator that punished the company specifically for doing something — trying to reinvent a low-cost new college education — that are core goals of federal policy. And so even as Obama trumpeted innovation from the stage in Scranton, Freedman’s attempt to put it into practice seemed to have hit a wall.

“It struck me as highly ironic and deeply frustrating that we were trying to do exactly what Obama describes what the market needs and yet we’re getting resistance from his administration,” said Freedman, an earnest, bald 34-year-old who started Altius after selling a college recruitment technology company in 2004.