California

The US government has decided to cancel 72 million USD in student loans for borrowers who attended Ashford University, a former for-profit institution that the University of Arizona purchased in 2020, source reported on Wednesday.

As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students, U.S. Under Secretary of Education James Kvaal said in a statement. 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.

Source reported the Education Department announced that 2,300 borrowers who were allegedly misled by Ashford University will have their loans forgiven. The department also added that it planned to recoup the money from the University of Arizona.

The decision to cancel of loans came after a lawsuit brought by the state of California against Ashford and its parent company Zovio. In the investigation of the lawsuit, evidence showed that Ashford and Zovio made numerous substantial misrepresentations during that period that borrowers relied upon to their detriment.

The period was from March 1, 2009, through April 30, 2020, the department said.

As per source, the California Department of Justice won the lawsuit last year with the court concluding that the university had made more than 1.2 million misleading representations nationwide to prospective students and assessing a civil penalty of $22.3 million.

The Education Department added that only 25 percent of students graduated from the university within eight years of enrollment.