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ED Discharges $72 Million in Student Loan Debt for Borrowers Who Attended Ashford University in California

By Hugh T. Ferguson, NASFAA Managing Editor

The Department of Education (ED) on Wednesday announced it will cancel the federal student loans of 2,300 borrowers who enrolled in an online for-profit institution based in San Diego, California.

The latest discharge would total $72 million and, per ED, resulted from evidence of “numerous substantial misrepresentations” by Ashford University and its parent company, Zovio, Inc., that were corroborated through submitted borrower defense applications.

Among the findings, ED determined that, from March 1, 2009 through April 30, 2020, Ashford: falsely told students they would be able work as teachers, social workers, nurses and substance abuse counselors, but the school never attained the necessary accreditation; lied about the fees associated with financial aid and costs associated with attendance; misled students about the timeline for obtaining a degree; and misled students about the availability transfer credits.

According to the findings, only 25% of students graduated from Ashford within eight years of enrolling. The borrower defense applications also described borrowers’ inability to obtain employment, unexpected financial burdens, and an inability to complete their programs.

The evidence, independently verified by ED, was initially gathered by California’s Department of Justice which brought forth a successful lawsuit against Ashford and its parent company.

“What Ashford University did to its students was unconscionable and illegal. That’s why the California Department of Justice took Ashford and its parent company to court,” said California Attorney General Rob Bonta, in a call with reporters on Wednesday. “Ultimately, we prevailed, securing more than $22 million in penalties.”

ED said their investigation into Ashford would continue and that the department plans to review evidence as to whether Ashford’s management and leadership violated any federal laws or regulations that threaten the integrity of federal student financial aid programs.

“If the evidence shows they did, the department may pursue appropriate remedies to enforce those rules,” senior officials from ED said.

Per the department, Wednesday’s discharge only applies to borrowers who have filed a borrower defense application; other students who attended the institution will need to submit an application in order to be eligible for the relief. Officials encouraged former Ashford students to fill out a borrower application by visiting StudentAid.gov/borrower-defense to submit their claim.

According to ED, the department has now, including Wednesday's action, approved $14.8 billion in relief for 1.1 million borrowers through borrower defense.

 

Publication Date: 8/31/2023


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