The Biden-Harris administration approved $72 million in loan discharges for more than 2,300 former Ashford University students following a lawsuit that exposed the school's misleading recruiting practices. The online for-profit university, based in San Diego, was the subject of a lawsuit led by the California Department of Justice, which concluded in March 2022, according to an Aug. 30 news release.
“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 the release. “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 lawsuit revealed extensive misrepresentations by Ashford University and its parent company, Zovio Inc., affecting students who enrolled between March 1, 2009, and April 30, 2020, the release reported.
"What Ashford University did to its students was unconscionable and illegal," California Attorney General Rob Bonta said in the release. "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."
The lawsuit's evidence disclosed Ashford recruiters made false claims about career prospects, financial aid and the length of degree programs. Specifically, recruiters misled students about employment opportunities in fields like teaching, social work and healthcare without having the necessary state approval or accreditation for such career paths, the release reported.
Furthermore, only 25% of students were found to have graduated from Ashford within eight years of enrollment, according to the release. The department will also investigate whether Ashford's management and leadership violated federal laws or regulations that could impact federal student financial aid programs.
Borrowers eligible for loan discharges will not have to make any more payments, will see their federal loan balances eliminated and will have any payments previously made refunded, the release said.
The department's announcement is part of a broader debt relief initiative, the release reported. The administration has thus far approved $14.8 billion in relief for 1.1 million borrowers who were victimized by deceptive colleges or unexpected closures.
