Biden-Harris Administration Announces Collective Release of 261,000 Ashford University Loan Borrowers

The Biden-Harris Administration today announced approval of a $4.5 billion collective discharge for 261,000 borrowers who attended Ashford University, a largely online institution, as of March 1 2009 as of April 30, 2020. This approval follows a request from the California Department of Justice, based on evidence obtained in a successful lawsuit filed against Ashford University LLC and its parent company, Zovio, Inc. (Zovio), regarding widespread misrepresentations in nine separate areas, including students’ ability to obtain necessary licensure, transfer credits, cost and amount of financial aid and the time it would take to complete a degree. The U.S. Department of Education (the Department) also conducted its own separate review of the evidence from California. This release brings the total amount of relief approved for borrowers whose schools have taken advantage, closed their doors, 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 has proposed an exclusion order against Andrew Clark, 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. Undersecretary of Education James Kvaal. “In reality, 90 percent of Ashford students never graduated, and the few who did were often left with heavy debt and low income. Today’s announcement will finally bring relief to many students who have been harmed by Ashford’s illegal actions.

Ashford borrowers who have been approved for discharge will receive emails from the ministry in the coming days informing them that the full amount of their outstanding balances on their Ashford loans will be discharged. Borrowers will not need to take any further action to receive relief. They will also not have to make additional payments on these loans. The release covers borrowers even if they did not present a borrower defense when requesting repayment.

In 2022, the California Department of Justice fined Zovio and Ashford more than $20 million, and an appeals court upheld the findings of wrongdoing and slightly reduced the sentence in 2024. The judge’s verdict concluded that Zovio and Ashford “created a high-pressure culture in admissions that prioritized enrollment numbers over compliance.” The court filing includes extensive evidence from Ashford employees about an environment that discouraged providing accurate information to students and documentary evidence demonstrating that leadership was well aware of the deficiencies. The court determined that the defendants made more than a million deceptive calls nationwide over more than a decade. The trial filing also includes evidence that borrowers had their educational dreams dashed when they discovered that Ashford never obtained the necessary licenses to become teachers, social workers or pursue 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 in an even worse situation: with mounting debt and looking for a job,” said California Attorney General Rob Bonta. “This is unacceptable and illegal. California put an end to this fraud when we sued Ashford and held him accountable for his deception. I am proud that California’s work to bring this case to trial has paved the way for the U.S. Department of Education to provide relief today to the hundreds of thousands of Americans who were misled by Ashford. I commend the Biden Administration and the Department of Education for ensuring that students who were misled into trusting Ashford have the opportunity for the better future they always deserved.

In addition to the California case, Ashford has faced numerous lawsuits and investigations at the federal and state levels, 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 its private loans and pay an $8 million civil penalty.

In 2023, the department announced the approval of $72 million in borrower defense relief for more than 2,300 students who requested relief from loans they took out to attend Ashford . The relief announced today extends this relief to cover additional borrowers. These pre-approvals and the class release announced today result from the following widespread misrepresentations:

• Ashford recruiters told students they could work as teachers, social workers, nurses or drug and alcohol counselors. But Ashford never obtained the state approval and/or accreditation necessary for students to enter these professions, meaning students lost years of their lives and incurred debt of tens of thousands of dollars for degrees they couldn’t use.
• Ashford recruiters also lied about the cost of attending Ashford, the amount and type of financial aid students would receive, and the amount of debt students would accrue. For example, before gaining access to borrowers’ financial aid information, some recruiters told prospective students that they would not have to pay fees, that every Ashford student was eligible for federal Pell Grants or that loan payments would be between $50 and $75. per month. Borrowers later discovered that these promises were false when, for example, they unexpectedly reached lifetime loan limits during their enrollment, incurred unexpected expenses, and were forced to withdraw with debt, but without a diploma.
• Ashford recruiters misled students about how long it would take to earn a degree from Ashford by stating that its bachelor’s degree programs were “accelerated” or by comparing Ashford’s bachelor’s degree programs to traditional Ashford schools. four years when in fact Ashford’s bachelor’s degree programs were structured to take five. academic years to complete.
• Ashford recruiters misled students about the possibility of transferring credits both in and out of Ashford. Recruiters told students that Ashford would accept previously earned credits, reducing the time and money students would spend earning their degrees. Students would later learn only a portion of the credits promised and actually transferred. Ashford recruiters also promised students that the credits they earned at Ashford would transfer to other universities, when that was not always true.

Aside from the false statements, Ashford had demonstrated its failure to serve students well. Only 10 percent of students graduate from Ashford within 8 years of enrollment and borrowers in their applications described inability to obtain employment, unexpected financial burdens and inability to complete their programs. Data released as part of the Financial Value Transparency and Gainful Employment rulemaking also shows that Ashford had the second highest number of graduates in programs that failed to provide sufficient financial value . This includes the failure to provide sufficient financial value to programs linked to misrepresentations in the California case, such as teaching, social work and psychology.

The Department congratulates the California Department of Justice on its successful prosecution of this case. The Department also thanks the attorneys general of Iowa and North Carolina for the helpful information they provided.

Proposed exclusion of former Ashford executive

Separately, the Department issued a notice of proposed government-wide exclusion from federal contracting and non-procurement transactions to Andrew Clark, founder, president and CEO of Zovio, which owned and operated the Ashford University. This would prevent him from acting as a director or officer of any institution in connection with the Title IV program, among other consequences.

Federal regulations authorize the department to suspend or debar individuals, businesses, and higher education institutions whose actions show that they are not responsible and that any dealings with them would endanger the integrity of the loan programs Title IV or other government funds.

The department is taking this action because Ashford violated federal regulations regarding material misrepresentations. The evidence from the California litigation and other sources, which the Department has independently reviewed, is mountainous. Ashford’s conduct can be attributed to Mr. Clark because he participated in, knew of, or had reason to know about Ashford’s false statements. Mr. Clark not only oversaw the illegal conduct, but personally participated in it, leading to some of the worst aspects of the boiler room recruiting culture.

The department will refer this matter to its Office of Hearings and Appeals to decide whether to debar Mr. Clark and, if so, for how long. The Ministry recommends an exclusion period of at least three years depending on the severity of the harm. Mr. Clark has the opportunity to challenge the proposed exclusion, and the Office of Hearings and Appeals will decide whether and for how long an exclusion should be effective.

An Unprecedented Support Record for Federal Student Loan Borrowers

Since day one, the Biden-Harris Administration has been committed to helping borrowers struggling with the burden of student debt and identifying those who qualify for 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 a million borrowers thanks to improved 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 resolved long-standing problems caused by past inaccuracies and misuse of forbearance by loan servicers.
• $18.7 billion for nearly 633,000 borrowers with total and permanent disabilities.
• $34 billion for more than 1.9 million borrowers whose schools took advantage, closed their doors or are covered by related legal settlements.

In addition to ensuring that student loans do not pose a barrier to educational and economic opportunities for students and their families, the administration also secured a $900 increase in the maximum Pell Grant amount – the largest increase in a decade – and finalized new rules to help protect borrowers. career programs that leave graduates with unaffordable debt and insufficient income.