In 2023, the agency made the decision to cancel loans for an initial 2,300 former Ashford students who had sought relief through the borrower defense program. This new development extends the forgiveness to all former students who were in attendance during the period of alleged misconduct, even if they did not formally apply for relief. The administration’s latest action will result in the eradication of loan balances for borrowers who had enrolled at Ashford between March 2009 and April 2020.
In an uncommon move, the department also moved to prevent Andrew Clark, the founder of Zovio, from holding an executive position at any institution that receives federal financial aid. A statement from the agency explained that it is proposing to debar Clark for a minimum of three years due to his direct involvement in the unlawful conduct at Ashford, where he not only oversaw the misconduct but actively participated in it, contributing to a toxic recruiting environment.
The final decision on this matter will be made by the department’s Office of Hearings and Appeals. Attempts to contact an attorney who previously represented Clark during his time at Zovio were unsuccessful.
Earlier, the Biden administration had indicated its intention to seek reimbursement from the University of Arizona to offset the loan cancellations, reasoning that the university inherited the liabilities associated with Ashford following its acquisition. However, progress on this front has stalled, with the Trump administration showing little interest in pursuing the matter, given its perceived favorable stance towards for-profit colleges.
The issue of student loan cancellation has been a point of contention between Republicans in Congress and the Biden administration. Critics, such as Rep. Virginia Foxx of North Carolina, have accused President Biden of overstepping his authority by utilizing the borrower defense program to cancel loans, transferring the financial burden to taxpayers who did not benefit from a college education. Foxx’s report this month criticized Biden for exploiting legal loopholes to cancel loans, particularly highlighting the mass cancellation approach employed in the Ashford case.
Foxx expressed confidence that with the transition to the Trump administration, such practices would be curtailed, signaling an end to what she viewed as an abuse of the system. President Biden recently announced the final round of loan forgiveness under the Public Service Loan Forgiveness Program, bringing the total number of borrowers receiving relief under various initiatives during his tenure to over 5 million, a record among U.S. presidents.
Despite these efforts, President Biden faced setbacks in fulfilling his pledge for broad student loan forgiveness. The Supreme Court blocked his proposal to eliminate up to $20,000 in debt for over 40 million Americans, and subsequent attempts to pursue this initiative were met with legal challenges from Republican-led states, entangling the matter in federal courts.
