More than 2,300 people who enrolled in the San Diego-based online school Ashford University will not have to make student loan payments following the approval of $72 million in debt relief, the Biden administration announced Wednesday.
The action follows a California Department of Justice lawsuit against Ashford and its parent company Zovio Inc., which alleged that in order to entice people to enroll, the school provided misleading statements to prospective students regarding career outcomes, costs, financial aid, pace of degree programs and transfer credits.
As part of the debt relief announced Wednesday, remaining federal loan balances will be zeroed out for borrowers and any payments borrowers made on their federal student loans will be refunded.
President Joe Biden said in a statement that the debt relief in question is intended to assist "over 2,300 borrowers who were cheated by Ashford University. These borrowers were lied to about the cost of attending Ashford, were misled about how long it would take to get a degree, and were deceived about the transferability of Ashford credits. They deserve better."
A civil trial stemming from the Department of Justice's lawsuit resulted in a San Diego judge ordering the companies to pay more than $22 million in penalties.
San Diego Superior Court Judge Eddie Sturgeon wrote in his ruling that students were falsely promised that Ashford degrees could be used to secure jobs in various fields, that the school misrepresented how much financial aid they would receive, and downplayed the student loan debt they would incur.
The judge further wrote that testimony from former Ashford employees revealed "a high pressure admissions department whose north star was enrollment numbers" and "a work environment permeated by fear, where closing the sale was prioritized above providing students with accurate information."
The school has since been acquired by the University of Arizona and turned into the University of Arizona Global Campus (UAGC). In a written statement, the University of Arizona said it is reviewing the Department of Justice’s actions and will be assessing its options.
“The University of Arizona had absolutely no involvement in, and is not directly or indirectly responsible for, the actions of Ashford and its parent company, Zovio Inc, on which the Department has based its discharge of these borrower defense to repayment claims. These actions of Ashford and Zovio occurred well before The University of Arizona Global Campus acquired Ashford University,” wrote Pam Scott, Associate Vice President of External Communications for the university, who noted that UAGC's leadership has no ties to Ashford or Zovio.
"As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students," Under Secretary of Education James Kvaal said. "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."
California Attorney General Rob Bonta thanked the Biden administration "for changing the lives of thousands of former Ashford students today. 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."
Officials say borrowers who qualified for a borrower defense discharge in September will be informed via email that their applications will be approved.
Approved claims cover borrowers enrolled in Ashford between March 1, 2009, and April 30, 2020, and who filed applications for borrower defense.
Applicable borrowers who are not benefiting from Wednesday's action can submit an application for relief online. Click here for help with the application.
