The Biden administration has announced the cancellation of student loans for more than 260,000 former students of the now-defunct for-profit Ashford University.
Ashford University, once owned by Zovio and later acquired by the University of Arizona in 2020, was one of the nation’s largest for-profit college companies with over 100,000 students.
Driving the news: The loan forgiveness initiative comes after a California court found that the university had misled prospective students about its accreditation, costs, and graduation duration.
- The Education Department had initially forgiven loans for 2,300 former Ashford students under the borrower defense program in 2023, but the latest action expands forgiveness to all former students who attended during the alleged misconduct, regardless of whether they applied for relief.
The big picture: Loans for borrowers who attended Ashford from March 2009 through April 2020 are set to be erased as part of the new action.
- In a rare move, the department is seeking to debar Andrew Clark, the founder of Zovio, from acting as an executive for any institution receiving federal financial aid due to his involvement in the unlawful conduct at Ashford.
Go deeper: The Biden administration had also planned to recoup money from the University of Arizona to offset the loan cancellation, but progress on this front has stalled, with little likelihood of continuation under the incoming Trump administration, perceived to be more favorable to the for-profit college industry.
- There has been contention between Republicans in Congress and the Biden administration over student loan cancellation, with the former arguing against the use of taxpayer money to forgive loans and accusing Biden of abusing the borrower defense program.
- Despite the loan forgiveness for Ashford University students, President Biden faced challenges in delivering widespread student loan forgiveness, as the Supreme Court blocked his plan to erase up to $20,000 for more than 40 million Americans. His second attempt at forgiveness was also met with legal challenges from Republican states.
