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Biden Cancels $72 Million in Loans for 2,300 Student Borrowers
Epoch Times ^ | 8/31/2023 | By Naveen Athrappully

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).


TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Front Page News; Politics/Elections
KEYWORDS: ashford; biden; bidenvoters; doe; studentborrowers; studentloans
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To: Red Badger

Chump change from the “PedoChump”. We’re talking TENS OF BILLIONS here. NOT MILLIONS. This chump stunt is for the Media to celebrate.


21 posted on 08/31/2023 11:53:18 AM PDT by FlingWingFlyer (Chumpkin and Garland must recuse themselves from any legal actions against President Trump.)
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To: Red Badger

There is always a right and wrong way of doing things. The easy way may not always be right. When ya do something like this and think it’s right.. The repercussions that follow tell you it was wrong.

If I had a loan like this forgiven, I would shout.. But it isn’t right. It is not right.

Joe Biden has a knack for going some really wrong things.. He is a senile disaster


22 posted on 08/31/2023 11:53:52 AM PDT by frnewsjunkie
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To: Red Badger
In 2023, the Department of Education was budgeteted:

$269.73 Billion

In what damn world is that money justified? Certainly in no Constitutional world.

This should ALL be at the local and state levels. ALL of it.

23 posted on 08/31/2023 11:55:32 AM PDT by rlmorel ("If you think tough men are dangerous, just wait until you see what weak men are capable of." JBP)
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To: vivenne
"So who is picking up the tab for the debt?"

If I had the graphic, I would post the image of the woman pointing directly towards the camera...

As Milton Friedman was fond of saying, "All debts get paid".

24 posted on 08/31/2023 11:57:29 AM PDT by rlmorel ("If you think tough men are dangerous, just wait until you see what weak men are capable of." JBP)
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To: Red Badger

How is this possibly legal? Doesn’t Congress have to pass legislation to do this?


25 posted on 08/31/2023 11:58:43 AM PDT by EinNYC
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To: EinNYC

make the DNC pay for them


26 posted on 08/31/2023 12:08:25 PM PDT by teeman8r (Armageddon won't be pretty, but it's not like it's the end of the world or something )
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To: Red Badger

This is truly crumbs and political spin at its best.

Forgiving 2,300 student loans after a “.... 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...” just screams 2,300 forgiven out of 40 million borrowers.


27 posted on 08/31/2023 12:53:27 PM PDT by Robert357
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To: rlmorel; Red Badger; gibsonguy
"So who is picking up the tab for the debt?"

My guess is we will pay indirectly. Inflation, taxes, etc.

Do students who got a diploma from this school resulting in employment get their debts forgiven too?

Did the borrowers get lodging, food, etc., as a part of this arrangement?

CNN: The Education Department’s review was based on evidence presented in court by the California Department of Justice during its successful lawsuit against the school and its parent company at the time, Zovio.
The court ruled in favor of the state in March 2022, ordering a penalty of more than $22.37 million – which is the subject of an ongoing appeal.

So the state of California is supposed to get $22M out of that lawsuit. I don't suppose Cal will contribute to the payments that these borrowers were supposed to pay to the lender?

28 posted on 08/31/2023 1:06:56 PM PDT by ding_dong_daddy_from_dumas (Re-imagine the media!)
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To: Red Badger

The larger question:

Is there enough debt they can cancel to qualify all the looming vote fraud so that it doesn’t look obvious when dems sweep the election (vote buying)?

I wish that was sarcasm.


29 posted on 08/31/2023 1:13:43 PM PDT by logi_cal869 (-cynicus the "concern troll" a/o 10/03/2018 /!i!! &@$%&*(@ -)
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To: frnewsjunkie

Obama stated that Joe has the ability to fork things up.


30 posted on 08/31/2023 2:44:37 PM PDT by Texas resident (We are living through Barak's fundamental transformation)
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To: Red Badger

The Biden administration has approved a $72 million dollar student loan forgiveness initiative, for a mere 10% kick-back to the big guy...


31 posted on 08/31/2023 4:03:05 PM PDT by unread (I pledge allegiance to the flag of the United States of America, and to the republic for which it st)
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To: TakebackGOP
What was the point of the SC’s ruling?

We are now at the stage in our Great American Experiment when the left will ignore rulings from an "illegitimate" Supreme Court that they don't like.

The only reason they didn't ignore Dobbs is because it has been a get-out-the-vote bonanza for the Democrats.

32 posted on 08/31/2023 4:07:10 PM PDT by Drew68 (Ron DeSantis for President. A conservative who fights and wins.)
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To: Red Badger

With this buy enough votes to swing the election?💰📮🗳️

Evil.

Note: a right wing radio talk show’s conservative guest was a young woman who said she hates to admit it but she’s rooting for the debt deal “because I owe so much money I will really profit from it.” At least she was honest. The host was uncomfortable but had to disagree.


33 posted on 08/31/2023 8:10:18 PM PDT by frank ballenger (You have summoned up a thundercloud. You're gonna hear from me. Anthem by Leonard Cohen)
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To: gibsonguy

Hunter sold a few more paintings? Left-over graft from some third-world sh!t-hole? Interest on an off-shore slush fund? Or the public till?


34 posted on 08/31/2023 10:54:39 PM PDT by Eleutheria5 (Every Goliath has his David. Child in need of a CGM system. https://gofund.me/6452dbf1. )
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To: Red Badger
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.


If every student hit the max of $20M, that only adds up to $800B. Isn't Wharton supposed to be a pretty good business school? And that should include basic math, right? I know it's gov't, but $200B+ in admin costs seems overly excessively high.


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.

Meh. Lots of degrees take more than four years. Most engineering is 120+ hours, which means average of 15+hr semesters, full of hard engineering courses. Many students have to take summer courses or add a semester or two. And wouldn't it be pretty obvious how long the degree takes? when you first enroll, your advisor should walk you through the degree, give you a degree plan / suggested course progression sheet that shows exactly which classes they want you to take, and when.
35 posted on 09/02/2023 7:00:11 AM PDT by Svartalfiar
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