Headquarters of Ashford University in San Diego, a for-profit university belonging to Bridgepoint Education.
Frank Duenzl | Picture-Alliance | DPA | AP
The Biden administration announced Wednesday that it would forgive $4.5 billion in student debt for 261,000 borrowers who attended the now-defunct Ashford University.
Borrowers who qualify for the relief are those who studied at the for-profit, largely online institution between March 1, 2009, and April 30, 2020.
The California Department of Justice requested the loan cancellation for federal student loan borrowers based on evidence it gathered during its successful lawsuit against Ashford University and its parent company, Zovio, Inc., the Education Department said.
California accused the university of deceiving students by making false promises and providing false information, including about costs and career outcomes, to get them to enroll.
The California Department of Justice secured a more than $20 million penalty against Zovio and Ashford in 2022, the Education Department said.
The recruiters at Ashford University misled students, telling them they would be able to work as teachers, social workers, nurses, or drug and alcohol counselors, the Education Department said. In reality, the university didn’t have the necessary state approval or accreditation for students to enter these professions, “meaning students wasted years of their lives and incurred tens of thousands of dollars of debt for degrees they could not use,” the department wrote in its press release.
Students were also lied to by Ashford staff about the cost of attendance, how much debt they’d accumulate and how long it would take to complete certain degrees, the agency added.
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“Numerous federal and state investigations have documented the deceptive recruiting tactics frequently used by Ashford University,” said U.S. Under Secretary of Education James Kvaal 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,” he wrote.
The University of Arizona acquired Ashford University in 2020. Zovio approved a plan to go out of business in late 2022, according to HigherEd Dive.
“The department notes that this decision was based on evidence presented in a lawsuit brought by the California Department of Justice against Ashford and its parent company, Zovio Inc.,” University of Arizona spokesman Mieczyslaw J. “Mitch” Zak said. “UAGC was not a party to, and did not participate in, the California lawsuit, and it had no relationship with Ashford or Zovio during this time period.”
Since Biden took office, he has forgiven debt for more than 5 million federal student loan borrowers, totaling $183.6 billion in relief.