(HorizonPost.com) – The US Department of Education announced last Wednesday that it is canceling $72 million in student loan debt for 2,300 borrowers who say Ashford University cheated them, the Associated Press reported.
A former for-profit school, Ashford University was purchased by the University of Arizona in 2020.
The Department of Education said in a statement that it will seek to recoup the debt from the University of Arizona.
The university has denied liability, saying it had no involvement nor is it responsible for the actions of Ashford University or its former parent company.
Ashford University was an online college owned by the San Diego-based company Zovio that enrolled over 100,000 students. In 2022, a California court found that the university frequently lied to prospective students to get them to enroll. Recruiters misled potential students about the school’s costs, accreditation, and the time it would take to graduate, according to the court.
The Department of Education’s action will automatically discharge the student loan debt of 2,300 borrowers who enrolled in Ashford University between March 2009 and April 2020 through the department’s borrower defense program. The balance will be zeroed out and borrowers will be refunded for payments made on their federal loans.
Under Zovio, Ashford recruiters told prospective students that they would get jobs as nurses, social workers, teachers, and counselors. However, the school never obtained accreditation for those professions, according to the lawsuit brought by California.
Recruiters also falsely claimed that students would not face out-of-pocket costs and boasted about accelerated programs despite the bachelor’s degree programs taking five years to complete.
Only one-quarter of Ashford University students graduated within eight years of enrollment.
A California court ruled in favor of the state in 2022 imposing a $22.3 million penalty on Ashford University. The penalty is being repealed.
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