Biden-Harris Administration announces group discharge for 261,000 borrowers with loans from Ashford University
The Biden-Harris Administration this week announced the approval of a $4.5 billion group discharge for 261,000 borrowers who attended Ashford University, a largely online institution, from March 1, 2009, through April 30, 2020.
The approval is in response to a request from the California Department of Justice based upon evidence it obtained during a successful lawsuit brought against Ashford University LLC and its parent company, Zovio, Inc. (Zovio) around widespread misrepresentations in nine separate areas, including students’ ability to obtain needed licensure, transfer credits, the cost and amount of financial aid, and the time it would take to earn a degree.
The U.S. Department of Education (Department) also conducted its own separate review of the evidence from California. This discharge brings the total amount of relief approved for borrowers whose schools took advantage of them, closed, or are covered by related court settlements to $34 billion for more than 1.9 million borrowers. Separate from this action, the Department also announced today that it issued a proposed debarment action to Andrew Clark, the founder, President, and CEO of Zovio.
“Numerous federal and state investigations have documented the deceptive recruiting tactics frequently used by Ashford University,” said U.S. Under Secretary of Education James Kvaal. “In reality, 90 percent of Ashford students never graduated, and the few who did were often left with large debts and low incomes. Today’s announcement will finally provide relief to many students who were harmed by Ashford’s illegal actions.”
Ashford borrowers approved for a discharge will be sent emails from the Department in the coming days notifying them that the full amount of outstanding balances for their Ashford loans will be discharged. Borrowers will not need to take any further action to receive relief. Nor will they have to make any additional payments on these loans. The discharge covers borrowers even if they have not submitted a borrower defense to repayment application.
In 2022, the California Department of Justice secured a more than $20 million penalty against Zovio and Ashford, and an appeals court upheld the findings of wrongdoing and made a small reduction in the penalty in 2024. The judge’s verdict found that Zovio and Ashford “created a high pressure culture in admissions that prioritized enrollment numbers over compliance.”
The court record includes extensive evidence from Ashford employees about an environment that discouraged providing accurate information to students and documentary evidence that executives were well-aware of the shortcomings. The court determined that the defendants made more than 1 million misleading calls nationwide over more than a decade. The trial record also includes evidence of borrowers seeing their educational dreams dashed when they found out that Ashford never secured the necessary approvals for them to become teachers, social workers or engage in other similar professions.
“Ashford University made false promises to students about the value of an Ashford degree and the opportunities it would create and instead left students worse off: with mounting debt and searching for a job,” said California Attorney General Rob Bonta. “This is unacceptable and illegal. California stopped this fraud when we sued Ashford and held it accountable for its deception. I am proud that California's work taking this case to trial paved the way for the U.S. Department of Education to provide relief today for the hundreds of thousands of Americans who were deceived by Ashford. I commend the Biden Administration and the Department of Education for making sure that students who were scammed into trusting in Ashford have the opportunity for a brighter future they always deserved.”
In addition to the California case, Ashford faced numerous lawsuits and investigations at the federal and state level, including from the Department’s Inspector General, the Securities and Exchange Commission, the Consumer Financial Protection Bureau, the U.S. Department of Justice, and the Attorneys General of Iowa and North Carolina. Some of these actions resulted in settlements including one with the CFPB requiring Ashford to discharge private loans and pay an $8 million civil penalty.
In 2023 the Department announced the approval of $72 million in borrower defense to repayment discharges for more than 2,300 students who applied for relief from loans they took out to attend Ashford. The discharge being announced today expands on that relief to cover additional borrowers.
Those prior approvals as well as the group discharge announced result from the following widespread misrepresentations:
• Ashford recruiters told students they would be able to work as teachers, social workers, nurses, or drug and alcohol counselors. But Ashford never obtained the necessary state approval and/or accreditation for students to enter these professions, meaning students wasted years of their lives and incurred tens of thousands of dollars of debt for degrees they could not use.
• Ashford recruiters also lied about the cost to attend Ashford, the amount and type of financial aid students would receive, and the amount of debt students would accumulate. For instance, before they had access to borrowers’ financial aid award information some recruiters told prospective students that they would not incur out-of-pocket costs, that every Ashford student qualified for Federal Pell Grants, or that loan payments would be $50–$75 per month. Borrowers later discovered these promises were untrue when, for example, they unexpectedly reached lifetime loan limits during their enrollment, unexpectedly incurred out-of-pocket costs, and were forced to withdraw with debt but no degree.
• Ashford recruiters misled students about how long it would take to obtain an Ashford degree by stating its bachelor’s programs were “accelerated” or by comparing Ashford’s bachelor’s programs to traditional four-year schools when, in fact, Ashford’s bachelor’s degree programs were structured to take five academic years to complete.
• Ashford recruiters misled students about the ability to transfer credits both into Ashford and out of Ashford. Recruiters told students that Ashford would accept previously earned credits, reducing the amount of time and money students would spend completing their degrees. Students would later learn only some of the promised credits actually transferred. Ashford recruiters also promised students that the credits they earned at Ashford would transfer to other universities, when this was not always true.
Outside of the misrepresentations, Ashford had a demonstrated track record of failing to serve students well. Only 10 percent of students graduate 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. Data released as part of the rulemaking on financial value transparency and gainful employment also show that Ashford had the second highest number of graduates in programs that failed to provide sufficient financial value. This includes failing to provide sufficient financial value in programs tied to misrepresentations in the California case, such as teaching, social work and psychology.
The Department congratulates the California Department of Justice for its successful litigation of this case. The Department also thanks the Iowa and North Carolina Attorneys General for the helpful information they provided.
Separately, the Department issued a Notice of Proposed Government-Wide Debarment from Federal Procurement and Non-Procurement Transactions to Andrew Clark, the founder, president, and CEO of Zovio, which owned and operated Ashford University. This would stop him from acting as a principal or executive of any institution in connection with the Title IV Program, among other consequences.
Federal regulations permit the Department to suspend or debar individuals, companies, and institutions of higher education whose actions show that they are not responsible and that transacting with them would risk the integrity of the Title IV loan programs or other government funds.
The Department is taking this action because Ashford violated federal regulations regarding making substantial misrepresentations. The evidence from the California litigation, and other sources, which the Department independently reviewed, is mountainous. The conduct of Ashford can be imputed to Mr. Clark because he participated in, knew, or had reason to know of Ashford’s misrepresentations. Mr. Clark not only supervised the unlawful conduct, he personally participated in it, driving some of the worst aspects of the boiler-room-style recruiting culture.
The Department will refer this matter to its Office of Hearings and Appeals for a decision on whether to debar Mr. Clark and if so, for what length of time. The Department recommends a debarment period of not less than three years based on the severity of the harm. Mr. Clark has the opportunity to contest the proposed debarment, and the Office of Hearings and Appeals will decide whether and for how long a debarment should be effective.
Since day one, the Biden-Harris Administration has been committed to helping borrowers who have struggled with the burden of student loan debt and to identifying those who are entitled to targeted relief. In total, the Biden-Harris Administration has approved student loan relief for 5.3 million borrowers. This includes:
• $78.5 billion and more than 1 million borrowers through improvements to Public Service Loan Forgiveness.
• $56.5 billion for more than 1.4 million borrowers through Income-Driven Repayment, including the Saving on a Valuable Education SAVE plan. This includes administrative adjustments to income-driven repayment that brought borrowers closer to forgiveness and addressed longstanding problems due to past inaccuracies and the misuse of forbearance by loan servicers.
• $18.7 billion for nearly 633,000 borrowers with a total and permanent disability.
• $34 billion for more than 1.9 million borrowers whose schools took advantage of them, closed, or are covered by related court settlements.
In addition to ensuring that student loans are not a barrier to educational and economic opportunity for students and families, the Administration also secured a $900 increase to the maximum Pell Grant award—the largest increase in a decade—and finalized new rules to help protect borrowers from career programs that leave graduates with unaffordable debts and insufficient earnings.
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