Biden Regime Cancels $72 Million In Student Loans For 2,300 Borrowers
According to a report by Naveen Athrappully of The Epoch Times the Biden regime has approved a $72 million dollar student loan forgiveness program with the aim of granting relief for students who were victims of an online school’s alleged fraud scheme.
Over 2,300 students who attended Ashford University could apply for loan forgiveness. This is a former online for-profit university based in San Diego, California.
On August 30, 2023, the United States Department of Education (DOE) released a statement announcing that a loan forgiveness program has been approved under the “borrower defense” student aid program that has existed for decades. Through the use of this program, student loan borrowers who were the victims of for-profit colleges’ fraud schemes could file an application for forgiveness.
The green light to loan forgiveness was given after the DOE looked over evidence put forward by the California Department of Justice (DOJ) in its successful 2017 lawsuit filed against Ashford and parent company Zovio.
The lawsuit blamed Ashford for using fraudulent practices designed to mislead students. On March 3, 2022, a court issued a ruling favorable for the California DOJ, determining that Ashford made over 1.2 million misleading advertisements across the nation to would-be students.
After reviewing the case, the DOE approved loan forgiveness for Ashford’s student borrowers who submitted an application for debt relief through the borrower defense program. The relief applies to borrowers who enrolled in Ashford from March 1, 2009 to April 30, 2020.
“As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” stated US 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 $72 million forgiveness announcement came a few days after dozens of Democrats penned a letter (pdf) to President Biden calling on him to “continually find ways to use your authority to bring down student debt” after the Supreme Court’s earlier decision to prevent the government from implementing a massive student debt forgiveness scheme.
On June 30, the Supreme Court struck down the Biden regime’s plan to cancel as much as $20,000 in loan principal for 40 million American student borrowers.
The Congressional Budget Office (CBO) had projected that this forgiveness plan would cost roughly $400 billion. However, an estimate from the Wharton School put the price tag higher at over $1 trillion.
In the Ashford case, the DOE discovered that the school was involved in “extensive substantial misrepresentations.” Recruiters sold students the idea that they would be able to work as teachers, nurses, social workers, and drug and alcohol counselors although Ashford never possessed the necessary state approval or accreditation to grant students the ability to enter these professions.
Ashford’s 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,” per the DOE’s account of events in its press release.
Recruiters misled students about the time it would take to acquire an Ashford degree. In comparison to traditional four-year institutions, Ashford’s programs generally took students five academic years to complete, per the press release.
Just 25% of students were discovered to have graduated from Ashford within 8 years of enrolling.
The evidence from the California case also demonstrated that three-quarters of all Ashford bachelor’s degree programs would have yielded a negative value for students, making the education they obtained effectively worthless.”
Thanks to the DOE’s approval, Ashford student borrowers will not have to make any more loan payments. Instead, the Biden regime will discharge the loans. “Borrowers will see any remaining loan balances for federal loans zeroed out and credit trade lines deleted. Any payments those borrowers made to the Department on their federal student loans will be refunded,” the DOE noted.
The University of Arizona acquired Ashford in 2020 and converted it into the University of Arizona Global Campus (UAGC).
While mass student loan forgiveness is not the way to go, student debt relief should be used on a limited basis for cases of blatant fraud exercised by academic institutions.
This is a rational use of government action. Ultimately, the US needs an overhaul of its education system. The education sector must have more competition and accountability if it wants to continue churning out high-level professionals and preparing the next generation for the many challenges that lie ahead in the 21st century.