The Biden administration announced Wednesday that it would be cancelling $72 million in student loans for borrowers who attended Ashford University, a former for-profit institution that the University of Arizona purchased in 2020.
“As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” U.S. Under Secretary of Education 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.”
The Education Department announced that 2,300 borrowers who said they were misled by Ashford University will have their loans forgiven. The department said that it planned to recoup the money from the University of Arizona.
The basis of this cancellation comes from a lawsuit brought by the state of California against Ashford and its parent company Zovio. Evidence from that lawsuit showed that Ashford and Zovio “made numerous substantial misrepresentations during that period that borrowers relied upon to their detriment.”
The period was from March 1, 2009 through April 30, 2020, the department said.
The California Department of Justice won the lawsuit last year with the court concluding that the university had made more than 1.2 million “misleading representations nationwide to prospective students and assessing a civil penalty of $22.3 million.”
The Education Department added that only 25 percent of students graduated from the university within eight years of enrollment. The announcement said department officials will investigate whether Ashford’s management team “took actions” in violation of federal law or regulations, adding that the department may pursue “appropriate remedies” if they find evidence of such actions.
California Attorney General Rob Bonta said what the university “did to its students was unconscionable and illegal,” which is why the state took the school to court.
“I want to thank the Biden-Harris Administration for changing the lives of thousands of former Ashford students today,” Bonta said in a statement. “They have lived a nightmare for too long. I encourage other individuals who took out federal student loans to attend Ashford, and were subject to its deceptive or misleading tactics, to apply for relief from the U.S. Department of Education as soon as possible.”
Borrowers who were impacted will be notified by the Education Department, the announcement stated. The announcement marks the Education Department’s latest approval of loan discharges for borrowers who attended schools that misled them or engaged in misconduct. Other schools whose borrowers may be eligible for cancelled loans include Corinthian Colleges, Marinello Schools of Beauty, DeVry University and more.