Biden admin cancels another $72 million in federal student loan debt for 'misled' borrowers

The Biden administration announced on Wednesday that another $72 million in federal student loan debt would be canceled for the 2,300 borrowers who attended Ashford University based in San Diego, California.

As a result of a 2017 lawsuit from the California Department of Justice, the United States Department of Education concluded that Ashford University and its parent company, Zovio, Inc., "made numerous substantial misrepresentations" from March 1, 2009, through April 30, 2020.

The lawsuit claimed that the university and its leadership "engaged in numerous practices that misled and deceived prospective Ashford students," according to a Wednesday press release from the Department of Education. In March 2022, the court found 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."

Ashford University was accused of creating a "high-pressure admissions department" and pushing a "fear-based culture." According to court documents, "Admissions counselors would cross a 'gray line' ethically or 'do things they wouldn't normally do' to boost numbers to keep their jobs."

The court found that Ashford University misled students into believing they could become teachers, social workers, nurses, and drug and alcohol counselors, yet the school never acquired state approval or accreditation for these professions. Students were also misled about the costs of attending the university, how long it would take to complete bachelor's degree programs, and the ability to transfer credit into and out of the school.

"Only 25 percent of students graduated from Ashford within 8 years of enrolling and borrowers in their applications described the inability to obtain employment, unexpected financial burdens, and an inability to complete their programs," the Department of Education stated.

In 2020, the online for-profit school was acquired by the University of Arizona. It has since been turned into the University of Arizona Global Campus.

California Attorney General Rob Bonta called Ashford University's deceptive practices "unconscionable and illegal." He thanked the Biden administration for "changing the lives of thousands of former Ashford students" who have "lived a nightmare for too long."

United States Under Secretary of Education James Kvaal said, "As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students."

"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," Kvaal added.

The Department of Education also plans to investigate whether Ashford University's administration violated federal laws or "threatened the integrity of the federal student financial aid programs."

Federal student loan borrowers who attended Ashford University will have their remaining loan balances canceled, and all previously made payments will be refunded.

The Biden administration has canceled over $116 billion in federal student loan debt for 3.4 million borrowers.

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