California AG asks government to waive debt after judge rules college misled students
A for-profit, online university misled students to entice them into enrollment, a California judge has ruled.
Now California’s attorney general wants the government to waive those students’ federal loan debt.
A judge at the San Diego Superior Court found that Ashford University gave students false information about career outcomes, costs, financial aid, transfer credits and pace of programs.
In March 2022, Judge Eddie C. Sturgeon fined the school and its parent company, Zovio, more than $22 million.
“The Court finds that Defendants operated a high-pressure admissions department where the primary focus was enrollment numbers rather than truthful advising,” Sturgeon wrote in the Friday decision.
Ashford was bought by the University of Arizona in 2020 to become the University of Arizona Global Campus. Zovio, formerly Bridgepoint Education, agreed to pay liabilities incurred by Ashford prior to its sale in December 2020. California’s attorney general sued Ashford and Zovio in 2017.
A representative for Novio did not respond to a request for comment.
The lawsuit is one of several that California has filed over student rights, for-profit colleges and debt issues.
In January, California’s and dozens of other attorneys’ general announced a settlement with student-loan giant Navient over allegations of misconduct in its lending practices. As a result, Navient will cancel $1.7 billion in private loan debt for certain borrowers and offer $95 million in restitution for borrowers across the country.
Navient’s chief legal officer denied wrongdoing on behalf of the company; Chief Legal Officer Mark Heleen said that the decision to settle was made to avoid additional time and cost burdens.
About $11.5 million of the direct restitution and $261 million of the private debt cancellation are for Californians, according to the California attorney general’s office.
In December, California Attorney General Rob Bonta said that the state resolved a lawsuit against the United States Department of Education to commit to fixing loan forgiveness programs for people who work at non-profits and government entities.
Other suits that California is a part of against the U.S. Education Department continue, including one over the Trump administration’s replacement of the 2016 “borrower defense” regulations and efforts to ease oversight on for-profit colleges.
The state is still suing the U.S. Department of Education over not providing debt relief to students who attended Corinthian Colleges, a for-profit university conglomerate that is now defunct. Both the California attorney general’s office and the U.S. Education Department had found that Corinthian’s Heald College, Everest Institute and WyoTech misrepresented job placement rates.
After the San Diego judge ruled in the case against Ashford, Bonta said the for-profit university “made false promises to students about the value of an Ashford degree, leaving students with mounting debt, broken promises, and searching for a job.”
Bonta called on the U.S. Department of Education to “swiftly” relieve Ashford students from their federal student loan debt based on the court’s decision.
A spokesperson for the U.S. Education Department said that the agency was exploring ways to provide relief to federal borrowers who went to Ashford.
“We’ve won this battle, but the broader fight continues,” Bonta said.
This story was originally published March 8, 2022 at 1:16 PM with the headline "California AG asks government to waive debt after judge rules college misled students."
