President Joe Biden’s administration announced Wednesday that it is providing $72 million to support more than 2,300 student borrowers who have applied for a loan waiver to pay for graduate degrees at Ashford University, a former for-profit online college in San Diego, which was found to be a fraud participant.
The ex-students in question will be contacted by the Department of Education next month to confirm that their applications have been approved.
The decision follows a Department of Education review of evidence presented by the California Department of Justice after it won a lawsuit against Ashford and parent company Zovio last year.
“The defendants created a high-pressure admissions department whose north star was enrollment numbers,” a court said in its March 3, 2022, ruling.
The court also ordered Ashford and Zovio to pay a $22.3 million civil penalty, which has been appealed.
“Based on the evidence presented in this lawsuit, which covered the period from March 1, 2009 to April 30, 2020, the [Education] The Department concluded that Ashford and Zovio made numerous material misrepresentations during this period that borrowers relied upon to their detriment,” the Department said in one press release.
The approved $72 million in funding covers claims from students who enrolled during the 11-year period and filed a borrower’s defense whose claims are supported by the results of the review.
In a statement, Under-Secretary for Education James Kvaal said Ashford had used “high pressure and fraudulent recruitment tactics” to lure students.
“Today we are protecting the students who were cheated by Ashford, and we will also hold the perpetrators accountable, protecting taxpayers and preventing future wrongdoing,” he said.
Biden echoed Kvaal and said his government will not allow colleges to exploit students.
Among other things, Ashford and Zovio lied to the students about the cost of attending and the type of financial aid they would receive, according to the court ruling and the Department of Education review. Ashford and Zovio also compared their degrees to traditional four-year degrees, even though the college’s undergraduate programs took five years to complete.
Additionally, only 25% of students have graduated from Ashford within eight years of enrollment, the Department of Education added.
California Attorney General Rob Bonta welcomed the government’s decision. He urged students who were affected but have not yet sought help to do so “as soon as possible”.
In 2020 the University of Arizona announced a plan to buy Ashford and rename it the University of Arizona Global Campus Acquisition complete in June of this year.
Although a Biden plan to forgive student loans was rejected by the Supreme Court earlier this summer, the government has given the green light to foreclose more than $116 billion in student loans.