The approvals stemmed from evidence against Ashford and Zovio, which were found to have engaged in numerous misrepresentations that affected borrowers who relied on them.
The approvals stemmed from evidence against Ashford and Zovio, which were found to have engaged in numerous misrepresentations that affected borrowers who relied on them.
The Biden-Harris Administration has given the green light to disburse $72 million in borrower defense to repayment discharges for more than 2,300 students who were enrolled at Ashford University, a now-defunct online for-profit institution headquartered in San Diego.
The announcement from the White House comes after a review conducted by the US Department of Education, which examined evidence from the California Department of Justice during a successful lawsuit against Ashford and parent company, Zovio.
Both entities faced legal action, resulting in a judgment against them in March 2022, it added.
The approvals stemmed from the extensive evidence presented during the lawsuit, which covered the period from March 1, 2009, through April 30, 2020.
The department’s findings revealed that Ashford and Zovio had engaged in numerous substantial misrepresentations during this timeframe, adversely affecting the borrowers who relied on them.
Education Undersecretary James Kvaal said 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,” he said.
The department will also further scrutinize the evidence to assess whether members of Ashford’s management and leadership violated federal laws or regulations, potentially threatening the integrity of federal student financial aid programs. If substantiated, appropriate remedies may be pursued to enforce these rules.
California Attorney General Rob Bonta expressed gratitude for the Administration’s actions, stating: “What Ashford University did to its students was unconscionable and illegal.”
He also encouraged other individuals who had taken out federal student loans to attend Ashford to apply for relief from the US Department of Education promptly.
The legal battle against Ashford and Zovio dates back to 2017 when the California Department of Justice filed a lawsuit against them.
The lawsuit alleged that Ashford and its leadership had engaged in deceptive practices that misled and deceived prospective students.
After an 18-day trial with numerous witnesses and exhibits, the court ruled in favor of the California Department of Justice on March 3, 2022.
The judgment imposed a civil penalty of $22.3 million, emphasizing that the institutions prioritized enrollment numbers over students’ welfare.
The court’s decision underscored Ashford and Zovio’s extensive substantial misrepresentations, including false promises of careers as teachers, social workers, nurses, or counselors without obtaining necessary state approval or accreditation; misleading information about the cost of attendance, financial aid, and loan payments; misrepresentation of program duration; and misleading claims about credit transfers to and from Ashford.
These misrepresentations had severe consequences for borrowers, with only 25 percent of students graduating from Ashford within 8 years of enrollment, leading to difficulties in finding employment and unexpected financial burdens.
Borrowers affected by these deceptive practices will not be required to make any payments on the discharged loans.
The department will notify eligible borrowers via email in September, indicating the approval of their borrower defense discharges.
Borrowers will witness their remaining federal loan balances zeroed out, and credit trade lines will be deleted. Any payments made on these loans to the Department will be refunded.
Additionally, the department intends to initiate a recoupment proceeding at a later date to seek repayment of liabilities associated with these approved claims.
The department commended the California Department of Justice for its efforts in pursuing justice against a predatory institution. It also expressed appreciation for the support and information provided by the offices of the Iowa and North Carolina Attorney General.
Borrowers who attended Ashford University during the specified period and were harmed by these misrepresentations but have not yet applied for borrower defense can visit StudentAid.gov/borrower-defense to submit a claim.
Meanwhile, the department assured it remains unwavering in its commitment to provide relief to students and borrowers entitled to it under applicable law.
