The Biden administration said Wednesday it will be cancelling student loans from borrowers who attended Ashford University, which was acquired by the University of Arizona in 2020.
The decision comes after an independent review from the U.S. Department of Education found an education from the for-profit school was “effectively worthless," as students were lied to about the cost, time requirement, and value of degrees obtained.
“As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” U.S. Under Secretary of Education James Kvaal said in a statement. “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.”
Therefore, the department said it is canceling $72 million in student loans for more than 2,300 former Ashford students.
In 2017, the California Department of Justice brought a lawsuit against Ashford and Zovio (which at the time was known as Bridgepoint Education) arguing that the for-profit college and its leadership engaged in numerous practices that misled and deceived prospective Ashford students. That suit led to an 18-day trial that featured nearly two dozen witnesses and more than 1,500 exhibits, plus additional written depositions.
On March 3, 2022, the court ruled in favor of the California Department of Justice, concluding that Ashford made more than 1.2 million misleading representations nationwide to prospective students and assessing a civil penalty of $22.3 million. As the decision said, the “Court heard substantial evidence that over the last decade, Defendants created a high-pressure admissions department whose north star was enrollment numbers.” It found that “admissions counselors would cross a ‘gray line’ ethically or ‘do things they wouldn’t normally do’ to boost numbers to keep their jobs.” The court found executives’ testimony that Ashford “always put students first” lacked credibility. In fact, the court described a “paper trail [showing] that company executives were well aware of [the admissions department’s] fear-based culture.”
The penalty assessed is the subject of an ongoing appeal, but Zovio did not challenge the court’s findings about the underlying conduct. [...]
Only 25 percent of students graduated from Ashford within 8 years of enrolling and borrowers in their applications described the inability to obtain employment, unexpected financial burdens, and an inability to complete their programs. The evidence from the California case also demonstrated that three-quarters of all Ashford bachelor’s degree programs would have resulted in a negative value for students, making the education they obtained effectively worthless. The Department approved these findings prior to July 1, 2023, and this action covers loans under the 1995 or 2016 regulation, as applicable.
Three years into the California lawsuit, on Aug. 3, 2020, the University of Arizona announced a plan for its affiliated foundation to acquire Ashford University and turn it into the University of Arizona Global Campus (UAGC). The University of Arizona acquired direct ownership of UAGC at the end of June 2023. (Education Department)
In a statement, a spokesperson for the University of Arizona said it “will be assessing its options.”
"The University of Arizona is reviewing the department’s action and related information and will be assessing its options," the statement said, reports Inside Higher Ed. "The University of Arizona had absolutely no involvement in, and is not directly or indirectly responsible for, the actions of Ashford and its parent company, Zovio Inc., on which the department has based its discharge of these borrower defense to repayment claims."
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