Biden Administration Cancels $4.5 Billion in Student Debt for Former Ashford University Students

The U.S. Department of Education announced Wednesday a massive student loan discharge affecting 261,000 borrowers who attended Ashford Unive...

The U.S. Department of Education announced Wednesday a massive student loan discharge affecting 261,000 borrowers who attended Ashford University, following evidence of widespread deceptive practices at the online institution.

The $4.5 billion relief package comes after a successful lawsuit by the California Department of Justice revealed extensive misrepresentations by the school.

The Department also announced plans to ban Andrew Clark, Ashford's founder and former CEO, from future participation in federal education programs through a proposed debarment action.

According to Under Secretary of Education James Kvaal, Ashford University's practices left a devastating impact on its students.

"In reality, 90 percent of Ashford students never graduated, and the few who did were often left with large debts and low incomes," said Kvaal.

The California lawsuit uncovered evidence that Ashford made more than 1 million misleading calls nationwide over a decade-long period. The school's misrepresentations included false promises about students' ability to become teachers and social workers, misleading information about program costs and financial aid, and deceptive claims about degree completion times and credit transfers.

California Attorney General Rob Bonta, whose office led the successful litigation against Ashford, praised the decision.

"This is unacceptable and illegal. California stopped this fraud when we sued Ashford and held it accountable for its deception,” he said.

Affected borrowers will receive email notifications about their loan discharges in the coming days and won't need to take any additional action to receive relief. The discharge covers loans taken out between March 1, 2009, and April 30, 2020.

This action is part of the Biden administration's broader effort to address student loan issues, which has now provided approximately $34 billion in relief to 1.9 million borrowers whose schools engaged in misconduct or closed.

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