WASHINGTON — More than 260,000 former students of the now defunct for-profit Ashford University receive their degrees student loans erased as the Biden administration continues cancellation of debts in his last days.
Ashford was once one of the largest for-profit colleges, with more than 100,000 students. It was owned by the Zovio company until the University of Arizona purchased the online college in 2020.
The Department of Education began forgiving loans to Ashford students after a California court routinely ruled against the university mislead potential students about the accreditation, the costs and the time it takes to graduate.
In 2023 the agency loans canceled for an initial 2,300 former Ashford students who requested relief through the borrower defense program. The new action extends forgiveness to all former students who were present during the alleged misconduct, even if they did not request relief.
The government’s new move will clear the loan balances of borrowers who attended Ashford from March 2009 to April 2020.
In a rare move, the department also sought to ban Zovio’s founder from serving as an executive for an institution that receives federal financial assistance. A statement from the agency said it is proposing to ban Andrew Clark for at least three years because he “not only oversaw the unlawful conduct, but also personally participated in it and exposed some of the worst aspects of the recruitment culture in drove the boiler room style.”
The matter will be decided by the department’s Office of Hearings and Appeals. A message was left with an attorney who represented Clark while he was with Zovio.
The Biden administration previously said it would seek to recover money from the University of Arizona to compensate for the cancellation, saying the university inherited the liability when it bought Ashford. However, those efforts appear to have stalled and are unlikely to be picked up by the Trump administration, which is expected to be much friendlier to the for-profit college sector.
Republicans in Congress have clashed with the Biden administration over student loan cancellations, saying it’s a presidential move that puts the burden on taxpayers who didn’t go to college. Rep. Virginia Foxx, R-N.C., released a report this month saying Biden was “trying to stretch every possible law” and was abusing the borrower defense program to cancel loans.
She disagreed with the practice used in the Ashford case of automatically canceling loans for large groups of borrowers even if they had not applied for relief. When Trump takes office, Foxx wrote, “the jig will finally be in place.”
This month, Biden separately announced a final round of forgiveness under the Public Service Loan Forgiveness Program. With that action, the administration had provided loan relief to more than five million borrowers through a variety of existing programs, more than any other president.
Yet Biden failed to deliver on his promise for widespread student loan forgiveness. The Supreme Court blocked his plan to erase up to $20,000 for more than 40 million Americans, and a second attempt failed in federal courts after several Republican states challenged it.
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