Posted on 08/31/2023 11:03:42 AM PDT by Red Badger
The Biden administration has approved a $72 million dollar student loan forgiveness initiative aimed at providing relief for students who were defrauded by an online school.
The loan forgiveness will be applicable to over 2,300 students who attended Ashford University, a former online for-profit school based in San Diego, California, said an Aug. 30 press release by the U.S. Department of Education (DOE). The loan forgiveness has been approved under the “borrower defense” student aid program that has been in place for decades. Under the program, student loan borrowers who were misled by for-profit colleges could apply for forgiveness.
The loan forgiveness was approved after the DOE reviewed evidence presented by the California Department of Justice (DOJ) in its successful 2017 lawsuit against Ashford and parent firm Zovio.
The lawsuit accused Ashford of engaging in deceptive practices to mislead students. On March 3, 2022, a court ruled in favor of the California DOJ, judging that Ashford made over 1.2 million misleading representations nationwide to prospective students.
Based on its review of the case, the DOE approved loan forgiveness for Ashford’s student borrowers who filed for debt relief under the borrower defense program. The relief is applicable to borrowers who enrolled in Ashford between March 1, 2009, and 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,” 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 $72 million forgiveness announcement comes days after dozens of Democrats wrote a letter (pdf) to President Biden asking that he “continually find ways to use your authority to bring down student debt” after the Supreme Court earlier blocked the government from implementing a massive student debt forgives scheme.
A few weeks earlier on June 30, SCOTUS had struck down the Biden administration’s plan to cancel as much as $20,000 in loan principal for 40 million student borrowers.
The Congressional Budget Office (CBO) had estimated that this forgiveness plan would cost around $400 billion. But an estimate from the Wharton School put the price tag higher at over $1 trillion.
Borrower Defense Injunction The “borrower defense” program that the DOE is using to discharge debts of Ashford students recently faced a setback from a court.
New rules regarding the borrower defense program were set to come into effect on July 1.
However, the New Orleans-based U.S. Court of Appeals for the 5th Circuit issued an injunction against the new rules on Aug. 7 in a case brought forward by the Career Colleges & Schools of Texas (CCST) which represents more than 70 for-profit educational institutions in the state.
CCST argued that the new rules would no longer require borrowers to prove individualized harm in most circumstances and place an unfair cost burden on educational institutions.
On the Student Aid website, the DOE states that it will not judge “any borrower defense applications under the latest rule unless and until the effective date is reinstated.”
The new rules would only apply to “all claims pending on or received on or after July 1, 2023,” according to a DOE Fact Sheet.
In its Aug. 30 press release, the DOE said that it had approved the findings related to Ashford student debt forgives prior to July 1, 2023. Plus, “this action covers loans under the 1995 or 2016 regulation” and not under the July 1, 2023, regulation that has been delayed by the injunction.
The Ashford Case In the Ashford case, the DOE found that the school had engaged in “extensive substantial misrepresentations.”
Recruiters told students they would be able to work as teachers, nurses, social workers, and drug and alcohol counselors even though Ashford never obtained the necessary state approval or accreditation to allow students 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,” the DOE stated in its press release.
Recruiters misled students about the time it would take to obtain an Ashford degree. Compared to the traditional four-year schools, Ashford’s programs took five academic years to complete, it stated.
Only 25 percent of students were found to have graduated from Ashford within 8 years of enrolment.
“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.”
With the DOE approval, Ashford student borrowers will not have to make any more payments on loans. Instead, the loans will be discharged by the Biden administration. An email to Ashford students who qualified for borrower defense discharge will be sent in September by the DOE.
“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 stated.
Ashford was acquired by the University of Arizona in 2020 and turned into the University of Arizona Global Campus (UAGC).
They didn’t vote democrat and kiss Biden’s feet ?
The headline is purposely misleading. He canceled their debt, in other words they are off the hook.
SLAP IN THE FACE TO ALL AMERICANS WHO WANTED TO ATTEND COLLEGE, BUT COULDN’T AFFORD IT.
SLAP IN THE FACE TO ALL AMERICANS WHO APPLIED FOR & PAID OFF THEIR STUDENT LOANS.
SLAP IN THE FACE FOR ALL AMERICANS WHO SKIMPED AND SAVED TO AFFORD COLLEGE.
WE DEMAND JUSTICE.
Why is the federal government doing anything with this? Sorry you didn’t do any diligence, but the taxpayers don’t need to help you
How are universities with multi-billion dollar endowments not “for profit?”
so they did vote democrat and kiss Biden’s feet
“The headline is purposely misleading. He canceled their debt, in other words they are off the hook.”
The headline is 100% correct and your post is incorrect. He
He cancelled their loans.
SOOOOOOOOOOOo-—IF this online school was ‘defrauding’ students-—does that mean that NONE of their CERTIFICATES are valid for any employment in those fields???
Cannot have it both ways-—IF their “Certificates” are valid-—then their classes need to cost them $$$..
AS FOR “ONLINE” students who take so long to ‘complete the courses’-——That is often the case with ONLINE classes. It takes serious motivation to keep working at the class material.
NO ONE is taking attendance records.
NO ONE is monitoring how much EFFORT the student is applying.
CANNOT BLAME THAT ON THE SCHOOL.
Same kind of control applies to speed signs-—
NO ONE drives 35 on my street-—
Cannot blame that on the speed sign or the county.
College loans should only be provided by private sector banks and individuals that are stupid enough to do so. Imagine a tranny freak with purple hair, face piercings, in androgynous clothing going into a bank for a student loan at a bank.
Banker: So, you need a student loan. What is your major?
Student: Black Lesbian Studies and a minor in History of Patriarchal Repression.
Banker: You have to get your parents to put up their house for collateral.
I don't believe in this concept of "online schools". At all. I simply don't believe that most humans are set up to learn in that fashion. I am definitely "old school" on this. Some people CAN learn effectively this way, but I believe most cannot. But that is only MY opinion.
Second Issue: "...Only 25 percent of students were found to have graduated from Ashford within 8 years of enrolment [sic]..."
Is it me? Is this a completely horrific and abysmal track record, or is this standard? Perhaps is it standard for the people they are "accepting" (probably any warm body) and those "warm bodies" are getting passed through for student loans because they are in the "correct" racial, sexual, or economic buckets?
This stinks to high heaven.
So is this ‘Ashford’ school one of those black schools — where money is laundered to BLM, etc ?
Hold your horses. This makes sense.
This university made misleading claims to entice students to enroll and pay tuition. The claims were found to be fraudlent, and so the US is stepping in. I would expect the school to be held accountable as well.
What was the point of the SC’s ruling?
The rest of my student loans have been forgiven!! Whoo-hoo!
Exactly. Also, they said the “university” (scare quotes are mine) misrepresented how much people would pay. I assume they told them they would have to take out larger loans than were needed.
In all cases, I do not care. PERIOD. The government should not be involved in this. I have been onboard with abolishing the Department of Education for years.
There are so many crap schools these days it’s hard to keep track. I remember when my one daughter started looking at schools when she was about 16. She’d come to me with some no name school that she saw on social media and ask me what I thought. It was a difficult time. She would get all wound up on a school and then I’d have to burst her bubble. She eventually straightened herself out. The lesson to be learned out of this is teenage girls are highly influenced on social media. It requires lots of deprogramming.
So who is picking up the tab for the debt?
Inflation has driven the cost for buying a vote up to $31,304.
Back when bubba was running, a good preacher or nursing home operator never had to pay over 10 bucks for a vote
For the record, I’ve been making my payments diligently for 20 years. Even through Obama and COVID. Never asked or whined about it, but if the gubmint wants to forgive the rest of it, who am I to argue?
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