Education Department Approves $72M Loan Forgiveness for Ashford University Students
Credit: Image Credit: Education Images / Contributor / Universal Images Group / Getty Images- The California Department of Justice won a lawsuit against Ashford University early last year.
- In that case, a judge held that the former university used deceptive recruiting tactics to lure students.
- Former students will now have their federal student loans forgiven.
What Ashford University did to its students was unconscionable and illegal,
California’s attorney general said.
Approximately 2,300 former students from Ashford University will see their federal student loans forgiven in September.
The Department of Education (ED) approved borrower defense claims for all students who attended the online, for-profit institution between March 1, 2009, and April 30, 2020. This comes after the San Diego Superior Court ruled in March 2022 that Ashford University and former parent company Zovio misled prospective students for over a decade, often spreading lies that cost students thousands of dollars and years of wasted time.
The University of Arizona completed its acquisition of Ashford University in June.
In early 2022, the California court ruled that Ashford made more than 1.2 million misleading representations to prospective students. It levied a $22.3 million civil penalty.
ED said it reviewed the case and mounted its own investigation into borrower defense to repayment claims made against Ashford University. It corroborated the court’s findings, thus granting widespread relief to former students.
Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,
ED Under Secretary James Kvaal said in a statement. Today we are protecting the students who were cheated by Ashford, and we will also hold the perpetrators accountable, protect taxpayers, and deter future wrongdoing.
ED may attempt to recoup funds from Ashford University’s current owner, but the department didn’t definitively say whether it plans to do so.
Ashford and Zovio engaged in many deceptive practices over 10 years, according to the court case. Some of those malpractices included:
- Telling prospective students their credits would transfer into or out of Ashford, when this was not the case
- Lying about the true cost of attendance at Ashford and whether students could qualify for federal financial aid
- Misleading students about how long it would take to graduate with a degree
- Lying about whether the institution had the correct accreditation for students to pursue a career in fields like teaching, social work, or nursing
Only 25% of students graduated from Ashford University within eight years, according to ED.
What Ashford University did to its students was unconscionable and illegal,
California Attorney General Rob Bonta said in a statement. I want to thank the Biden-Harris Administration for changing the lives of thousands of former Ashford students today. They have lived a nightmare for too long.
Bonta encouraged former students to apply for relief through the borrower defense loan discharge program.
ED will begin discharging student loans for former Ashford students in September, which is when federal student loan interest will begin accruing again for millions of borrowers. The department will only discharge loans taken out to attend Ashford. That means former students with outstanding loan debt to attend an institution other than Ashford will not have their entire loan balance erased, only loans that apply to Ashford.
President Joe Biden’s administration has aggressively pursued student loan debt discharge for defrauded students.
Thus far, his administration has forgiven loans for former students at:
- Westwood College – $1.5 billion
- Corinthian Colleges – $5.8 billion
- ITT Technical Institute – $3.9 billion