The Biden-Harris Administration announced Wednesday that student loans will be discharged for over 260,000 former students of San Diego-based online school Ashford University and its parent company, after courts ruled the school gave misleading statements to prospective students.
The announcement comes nearly three years after a San Diego judge ordered more than $22 million in penalties against Ashford and parent company Zovio Inc. for giving students "false or misleading information about career outcomes, cost and financial aid, pace of degree programs, and transfer credits, in order to entice them to enroll at Ashford."
A three-justice panel of the 4th District Court of Appeal later reduced the penalty by $1 million, but otherwise upheld the ruling from San Diego Superior Court Judge Eddie Sturgeon.
Those penalties stemmed from a lawsuit brought by the California Department of Justice that alleged Ashford recruiters lied to students, who typically left the school in debt and with degrees of little value in the job market.
"Numerous federal and state investigations have documented the deceptive recruiting tactics frequently used by Ashford University," U.S. Under Secretary of Education James Kvaal said in a statement. "In reality, 90 percent of Ashford students never graduated, and the few who did were often left with large debts and low incomes."
Ashford borrowers approved for a discharge will receive emails from the Department of Education "in the coming days." The email will notify borrowers of the full amount of loans to be discharged, according to Department of Education, which said no further action is needed to receive relief, no additional payments on those loans will need to be made, and borrowers will receive discharges even if they did not submit a borrower defense to repayment application.
The latest debt discharge pertains to 261,000 borrowers who attended Ashford between March 2009 and April, 30, 2020, according to the U.S. Department of Education. In 2023, the Biden administration announced that $72 million in student loans for around 2,300 borrowers who enrolled in Ashford University would be wiped out.
In a statement praising the debt relief, California Attorney General Rob Bonta said, "I commend the Biden Administration and the Department of Education for making sure that students who were scammed into trusting in Ashford have the opportunity for a brighter future they always deserved."
In a separate but related announcement, the Department of Education said it has proposed the debarment of Zovio's CEO, founder and president, Andrew Clark, which would mean he would be prohibited from acting as a principal or executive of any institution in connection with the Title IV loan program, which allows schools to distribute federal student aid.
The debarment matter will be referred to the Department of Education's Office of Hearings and Appeals for a final decision on whether to debar Clark and for how long.
"Mr. Clark not only supervised the unlawful conduct, he personally participated in it, driving some of the worst aspects of the boiler-room-style recruiting culture," the Department of Education said in a statement.
The school has since been acquired by the University of Arizona and turned into the University of Arizona Global Campus.
