The announcement affects 2,300 borrowers who attended Ashford University.
The Department of Education is canceling $72 million in debt for 2,300 borrowers who the department found were scammed by their school, officials announced Wednesday.
In addition, officials said they would seek to recoup the cost of the debt discharges from both Zovio, Ashford’s former parent company, and the University of Arizona, which now owns Ashford. Separate from other debt forgiveness The debt relief announced Wednesday is separate from other types of forgiveness that have grabbed headlines in recent months. In June, the Supreme Court struck down the Biden administration’s plan to cancel up to $20,000 in student debt for a wide swath of borrowers. Officials are taking another stab at widespread debt relief; if successful, it will likely impact millions of borrowers regardless of where they went to school.
In 2016, the department created a streamlined process for borrowers to apply for relief under the law. In August, a federal appeals court blocked a new version of the borrower defense rule, which the department issued in 2022. Wednesday’s announcement covers loans under the 1995 or 2016 version of the regulation, officials said.
In addition, the department found Ashford representatives told students that every Ashford student qualified for a Pell grant, the money the government provides to low-income students to attend college, and suggested that students would spend just $50 to $75 a month on loan payments.
Borrowers who are eligible for the relief will receive an email in September indicating their borrower defense applications have been approved, the department said. These borrowers won’t have to take any further action, and they will receive refunds for any money they’ve paid toward those loans.
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