Student Loan Forgiveness Done Right

Helping the victims of degree mills.

Memeorandum calls my attention to a Department of Education news release titled “Biden-Harris Administration Approves $72 Million in Borrower Defense Discharges for over 2,300 Borrowers who Attended Ashford University.”

The Biden-Harris Administration today announced the approval of $72 million in borrower defense to repayment discharges for more than 2,300 students who applied for relief from loans they took out to attend Ashford University (Ashford), which 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 and its parent company, Zovio, Inc. (Zovio), which resulted in a judgment against both entities 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.

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

“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 California Attorney General Rob 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.”

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 nationwide to prospective students and assessing a civil penalty of $22.3 million. As the decision 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 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:

  • Ashford recruiters told students they would be able to work as teachers, social workers, nurses, or drug and alcohol counselors. But Ashford never obtained the necessary state approval and/or accreditation for students to enter these professions, meaning students wasted years of their lives and incurred tens of thousands of dollars of debt for degrees they could not use.
  • Ashford recruiters also lied about the cost to attend Ashford, the amount and type of financial aid students would receive, and the amount of debt students would accumulate. For instance, before they had access to borrowers’ financial aid award information some recruiters told prospective students that they would not incur out-of-pocket costs, that every Ashford student qualified for Federal Pell Grants, or that loan payments would be $50–$75 per month. Borrowers later discovered these promises were untrue when, for example, they unexpectedly reached lifetime loan limits during their enrollment, unexpectedly incurred out-of-pocket costs, and were forced to withdraw with debt but no degree.
  • Ashford recruiters misled students about how long it would take to obtain an Ashford degree by stating its bachelor’s programs were “accelerated” or by comparing Ashford’s bachelor’s programs to traditional four-year schools when, in fact, Ashford’s bachelor’s degree programs were structured to take five academic years to complete.
  • Ashford recruiters misled students about the ability to transfer credits both into Ashford and out of Ashford. Recruiters told students that Ashford would accept previously earned credits, reducing the amount of time and money students would spend completing their degrees. Students would later learn only some of the promised credits actually transferred. Ashford recruiters also promised students that the credits they earned at Ashford would transfer to other universities, when this was not always true.

Borrowers relied upon these substantial misrepresentations to their detriment. Only 25 percent of students graduated from Ashford within 8 years of enrolling and borrowers in their applications described the inability to obtain employment, unexpected financial burdens, and an inability to complete their programs. The evidence from the California case also 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.

While I’m skeptical of the sort of blanket debt relief the administration initially attempted before having it struck down by the courts, forgiving the debts of those who were scammed by degree mills is an unalloyed good. These institutions prey on the most vulnerable and, frankly, the state and federal education departments should have flagged Ashford long before they did and denied them access to government-backed loans. Having failed to protect the students on the front end, bailing them out on the back end is the least we can do.

Even better, the USDOE worked with its California counterpart to extract damages from the scammers rather than simply putting the taxpayers on the hook. How the amount recovered compares to the amount of debt waived is not made clear in the release.

This paragraph in the middle of the release is, well, interesting:

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.

I was vaguely aware that this had happened but it stuck out like a sore thumb in the context of the release. Why would a well-regarded public flagship want a discredited degree mill? Apparently, for the infrastructure. An Inside Higher Ed report at the time of the acquisition:

The University of Arizona is moving online in a big way with a deal that could shake up the online education market and could signal more changes to come.

The public land-grant university announced Monday that it will acquire Ashford University — a fully online university that enrolls roughly 35,000 students.

As part of what it called a “transformational” definitive agreement, the University of Arizona will create a new nonprofit entity called the University of Arizona Global Campus that will buy Ashford University for $1.

The University of Arizona Global Campus will be a nonprofit institution affiliated with the University of Arizona. The new online university will maintain its own leadership, faculty members and academic programs.

It will also be accredited separately. Ashford University is currently accredited by the Western Association of Schools and Colleges (WASC) Senior College and University Commission, while the University of Arizona is accredited by the Higher Learning Commission.

Zovio, the publicly traded parent company of Ashford University, will support the University of Arizona Global Campus through a long-term strategic services agreement. Under the arrangement, Zovio will be deeply involved in running the new institution’s online programs — managing marketing, student recruitment and retention, student success, coaching, financial services, instructional design, and technology. Faculty members will retain ownership of course curricula and lead decisions about programs and courses the university offers.

I’m always more than a little skeptical when a name-brand university runs an online-only side project and my Spidey sense tingles extra hard when they farm the instructional design work out to a third party.

That story had a Breaking News banner atop it pointing me to another with the subhed, “The University of Arizona Global Campus, which acquired Ashford in 2020, might be on the hook for the discharged student loans.”

Consumer protection advocates and others criticized that purchase, which outsourced the operations of the online program to the publicly traded Zovio. UAGC announced last summer that it was buying Zovio’s assets and bringing the management of the online program in-house. UAGC president Paul Pastorek said at the time that the decision “severs our present from the past.”

It doesn’t appear that the Education Department sees it that way.

“When a school acquires another school, they agree to accept the liabilities from the school they are acquiring,” a senior department official said during a news conference Wednesday, though officials declined several times to specifically say which entity it considers Ashford’s current owner. The department has not signed off on the sale of Ashford yet.

As Andrew Brandt likes to say, there will be lawyers.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. JKB says:

    This gave me the idea that the Biden admin should try to “forgive” the student loans of those who got college loans for associates or bachelor courses but didn’t graduate. This would take care of those scammed by colleges of all types by being admitted without the necessary capability to succeed, those who had adverse events cause them to drop out, and likely those impacted by “diploma mills”. And it’s well documented that “going to college” adds nothing to the future earning ability of most people if you don’t get the magic parchment. Those who got their degrees should pay them off with those increased earnings that are always trotted out by “going to college” advocates.

  2. Tony W says:

    @JKB: Careful what you wish for.

    It’s understandable that conservatives don’t like people to develop strong reasoning skills – it’s hard to get people to buy made-in-China MAGA hats if the customer has a brain under that hat – but it also sabotages the country’s ability to compete in the global economy.

  3. steve says:

    Ashford/Zovio/U of Arizona should bear the full $72 million cost.


  4. Tony W says:

    @steve: Did you mean University of Phoenix?

  5. DK says:

    Seems unfair to the people who were scammed and didn’t get relief, but okay.

    Silly students. Don’t they teach in these fancy colleges that a $10k loan writeoff is a bridge too far? If they wanted loan forgiveness, they should have been multimillionaire congressman or corporations. Duh.

  6. James Joyner says:

    @steve: To me, it’s simply a function of what they bought. It seems obvious to me that Arizona taxpayers shouldn’t have to foot the bill for what the previous owners did unless they continued the past practices. But, again, this is a legal question rather than a moral one: it’ll all depend on the terms of the sale and applicable statutes.

  7. James Joyner says:

    @DK: I’m not sure who you’re arguing was scammed and should be bailed out. If you’re referring to students at other degree mills, I certainly hope DOE pursues similar deals.

  8. Just nutha ignint cracker says:

    The more troubling element to this particular shirt storm is that the University of Arizona wants to buyAshford/Zovio but seems uninterested in running the entity it is buying. Is the future going to be that you won’t be able to recognize a diploma mill/scam Trump-esque pseudo educational institution because they will all be run by “reputable” universities?

  9. James Joyner says:

    @Just nutha ignint cracker:

    Is the future going to be that you won’t be able to recognize a diploma mill/scam Trump-esque pseudo educational institution because they will all be run by “reputable” universities?

    It’s really been going on for decades now, although the degree to which there’s divergence seems to be increasing.

    Aside from the various “University College” variants, which in some cases go back to the 1960s, many of our most prestigious universities offer bullshit grad degrees. I’ve written about the “Harvard Extension School” boondoggle here before. Brown also offers “master’s degrees” to students who never set foot on campus and would induce guffaws from the graduate admissions office were they applying for a “real” Brown degree. It’s often unclear to me how much the students understand they’re getting a bullshit degree and how much is them going along with it and then trying to pass off their bullshit degree as real.

  10. Gromitt Gunn says:

    @JKB: Yes, by all means, let’s undermine the already shaky funding structures that a lot of community colleges exist within by putting them on the hook for fulfilling their mission of providing open access education to all of the adult residents of their service areas.

    /sarcasm (if that wasn’t obvious)

  11. mattbernius says:

    @Gromitt Gunn:
    Honestly, I think @JKB‘s idea isn’t bad (snark aside)–though to your point, perhaps it should only be for “four year” degrees (which tend to incur far more debt) than Community College degrees.

  12. Gromitt Gunn says:

    To clarify (probably unnecessarily) – I find diploma mills and sketchy for profit trade schools horrific. Most community college faculty do.

    But I also read sentiments like JKB’s and see how that can be twisted to force community colleges and open admissions regionals to abandon open admissions by telling people who are determined to be “without the necessary capability to succeed” by some standardized test that college *can’t* be for them.

    I very much dislike the attitude that everyone benefits from an academic degree, because I don’t think that’s true at all. I hate seeing students in my class who are only there because someone else told them they had to go to college, but they actually want to be someplace else.
    However we all benefit from there being places where someone whose academic aspirations got sidetracked along the way for whatever reason can get back on track. And that necessarily involves allowing people the opportunity to try and fail. Even if they’ve already tried and failed before.

  13. Just nutha ignint cracker says:

    @James Joyner: My only experience with this was taking classes at the University of Washington Experimental College–where it was clear to all parties that classes offered were personal interest classes taught by people who were qualified to be on the faculty but not necessarily so employed. French 101 had credit that was transferable to the university–though not guaranteed as transferable to other schools in the state, but the remainder were offered at no credit but with low tuition (usually $10 or so per course).

    That “reputable” universities have been doing what UAGC is doing “going on for decades now” saddens me but also only reinforces that higher education has gone from a service to an enterprise dedicated to degrees as products in service to the notion that we need ever larger pools of individuals whose training is mostly to provide surplus labor and the depressed wages that accompany it.

    [My inner Marxist bows and exits, stage left.]

  14. Just nutha ignint cracker says:


    without the necessary capability to succeed

    I don’t know what type of elitist shithole you grew up in, but the tone of your statements smacks of the type of pseudo-intellectual blather propagated by Murray and his intellectual forebearers [ETA: no surprise here] that [insert chosen race/ethnic group here] are by nature intellectually inferior and therefore too stupid to benefit from education.

    I will grant that there are fields where the pool of capable candidates is small. The entry opportunities for such fields tend to be small also. And I will grant that there are people literally to impaired to educate. That pool is vanishingly small. The notion at large of pools of people “without the necessary capability to succeed” is simply one of your racist wet dreams. Take your false meritocracy with you on your way out.

  15. Gustopher says:

    @James Joyner:

    It seems obvious to me that Arizona taxpayers shouldn’t have to foot the bill for what the previous owners did unless they continued the past practices. But, again, this is a legal question rather than a moral one: it’ll all depend on the terms of the sale and applicable statutes.

    The new owners should absolutely be on the hook for the liabilities of what they bought.

    And if the Arizona tax payers are not thrilled at that prospect, they should make sure the elected officials involved in the purchase are not re-elected.

    I suspect that if we were to look into this, this is less about buying up a valuable asset (an online university with a name synonymous with fraud doesn’t seem that valuable), and more about shoveling money into the pockets of well-connected friends of politicians — basically just bailing out the current owners.

    And, as a moral matter, I think allowing splitting off the assets from the liabilities, and selling off just the assets to protect investors is a moral hazard that promotes terrible behavior.

  16. Gustopher says:

    @Just nutha ignint cracker:

    And I will grant that there are people literally to impaired to educate. That pool is vanishingly small.

    It might be a matter of where I went to college — a very competitive engineering school — but a good chunk of the freshmen were people who never had to work to be successful at high school, and then were dropped into an actual difficult learning environment and flailed about until they either learned how to study or dropped out, or both.

    (The third group went on to Columbia and places like that — they just needed the remedial learning in learning. I was in that second group, so I never learned how to learn and just went to a state school and coasted to a degree and then coasted through a career)

    (I’m considering going to one of those for profit coding academies (or just claiming to have done so), and claiming that I had a previous career in animal husbandry or something, so I can restart my software career at the bottom and return to coasting)

    Anyway, JKB’s comment about some people not being ready for college sounds true to me.

    ETA: or not untrue, at least. That fuzzy middle ground.

  17. DK says:

    @James Joyner:

    I’m not sure who you’re arguing was scammed and should be bailed out.

    That comment of mine was meant as sarcasm, don’t overthink it hehe

  18. James Joyner says:

    @Just nutha ignint cracker: My understanding is that Harvard Extension School began as a community service: offering life enrichment classes for the community. I’m not sure when it got into the business of selling masters degrees in ‘Extension Studies’ that people try to pass off as something else.

    @Gustopher: They paid $1 and used an entirely different name. It appears to me that they were just buying an online teaching infrastructure. If the contract severed them from liabilities (and I have to assume it did since the lawsuits were underway) then they shouldn’t be liable.

  19. just nutha says:

    @Gustopher: Are not being ready and not being able the same in Gustopherland?

  20. Gustopher says:

    @just nutha: yes, mostly.

    Not being able can be either be a temporary or permanent condition.

  21. Gustopher says:

    @just nutha: yes, mostly.

    Not being able can be either be a temporary or permanent condition. and that’s before we get into how careful someone is being with language.

    ETA: that duplicate was an edit gone wrong, I think. Randomly editing to see if it happens again. Might have been a stupid user error, as I wasn’t paying a lot of attention.

    ETA2: maybe I hit the back button without thinking about it. Stupid user errors are very common in life.