Biden Administration Forgives $4.5 Billion in Student Loan Debt for 261,000 Borrowers
The relief is available for borrowers who attended Ashford University between 2009 and 2020.
On January 15, the U.S. Department of Education announced the approval of $4.5 billion in federal student loan discharges for former students of a for-profit university, pointing to evidence of “deceptive” practices within the institution.
This relief affects 261,000 borrowers who were enrolled at Ashford University from March 1, 2009, to April 30, 2020. Those eligible will be notified via email in the coming days and will not need to take any further steps, regardless of whether they previously applied for discharge.
In 2022, a California court ruled against Ashford and Zovio, its former parent company, for misleading students and imposed a $22 million fine. The state appellate court upheld the trial decision in 2024 but reduced the financial penalty by $933,453.
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The loan discharges announced on Wednesday were requested by California’s Attorney General Rob Bonta, whose office spearheaded the legal action against Ashford. The Department of Education remarked that it conducted its own investigation into the evidence prior to granting the relief.
Furthermore, the department plans to pursue a ban on Andrew Clark, the founder and CEO of Zovio, from participating in federal educational programs.
Beyond California, Ashford has faced lawsuits and investigations from various federal and state agencies, including the U.S. Justice Department, Securities and Exchange Commission, Consumer Financial Protection Bureau (CFPB), and the attorneys general of Iowa, Massachusetts, New York, and North Carolina. In 2015, Ashford discharged $23.5 million in high-interest private loans and paid an $8 million civil penalty to settle with CFPB.
The institution remains operational today, albeit under a new identity.
In 2020, during ongoing legal challenges in California, Zovio sold Ashford to the University of Arizona as part of a deal to create a nonprofit entity, the University of Arizona Global Campus (UAGC). This agreement involved the transfer of Ashford’s operations, including leadership, faculty, academic programs, and 35,000 students to UAGC at the nominal price of $1, with Zovio providing services to UAGC for 15 years in exchange for a share of the online institution’s revenue.
