Relief stems from evidence provided by the California Department of Justice during successful lawsuit brought against the college and its parent company
OAKLAND – Joined by California Attorney General Rob Bonta, the Biden-Harris Administration today announced the approval of $72 million in borrower defense to repayment discharges for more than 2,300 students who attended Ashford University (Ashford) and applied for relief. Ashford University was an online, for-profit school based in San Diego. The approvals come from a review by the U.S. Department of Education (Department) of evidence presented by the California Department of Justice during a successful lawsuit brought against Ashford University and its parent company, Zovio, Inc. (Zovio), which resulted in a judgment against the company in March 2022. Based upon evidence presented in that lawsuit, which covered the period from March 1, 2009, through April 30, 2020, the Department concluded Ashford and Zovio made numerous substantial misrepresentations during that period that borrowers relied upon to their detriment. The approved claims are from borrowers who enrolled in Ashford during this period and filed applications for borrower defense with allegations corroborated by these findings. Ashford student borrowers who were misled by Ashford and are not benefiting from today’s action can submit an application for relief at https://studentaid.gov/borrower-defense. For help with the application, Ashford student borrowers can visit https://studentaid.gov/borrower-defense-update.
“What Ashford University did to its students was unconscionable and illegal. That’s why the California Department of Justice took Ashford and its parent company to court. Ultimately, we prevailed, securing more than $22 million in penalties,” said Attorney General Bonta. “I want to thank the Biden-Harris Administration for changing the lives of thousands of former Ashford students today. They have lived a nightmare for too long. I encourage other individuals who took out federal student loans to attend Ashford, and were subject to its deceptive or misleading tactics, to apply for relief from the U.S. Department of Education as soon as possible.”
Borrowers will not have to make any payments on the loans being discharged. The Department will email borrowers who qualified for a borrower defense discharge in September that their applications have been approved. Borrowers will see any remaining loan balances for federal loans zeroed out and credit trade lines deleted. Any payments those borrowers made to the Department on their federal student loans will be refunded. Separately, the Department intends to initiate a recoupment proceeding at a later date to seek repayment of the liabilities associated with these approved claims.
“As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” said Under Secretary James Kvaal. “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.”
The Department will also review the evidence to examine whether members of Ashford’s management and leadership took actions that violated Federal laws or regulations and threatened the integrity of the federal student financial aid programs. If the evidence shows they did, the Department may pursue appropriate remedies to enforce those rules.
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 to prospective students nationwide and assessing a civil penalty of $22.3 million. As the judgment 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 that 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. As established by the court and verified through the Department’s independent review of the evidence, Ashford and Zovio engaged in extensive substantial misrepresentations:
Borrowers relied upon these substantial misrepresentations to their detriment. Additionally, the evidence from the California case 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.