Even though President Joe Biden’s student loan forgiveness program was blocked by the Supreme Court earlier this year, his administration is moving forward with more targeted student debt cancellations allowed under existing programs.
The Department of Education said Wednesday that it is canceling $72 million in federal student loan debt for more than 2,300 borrowers who attended the for-profit Ashford University in California.
Altogether, the Biden administration has approved the cancellation of more than $116 billion of student loan debt for over 3.4 million people – about 1.1 million of whom are borrowers who were misled by a for-profit college and granted relief under a program known as borrower defense to repayment.
This student debt forgiveness program has been in place for decades and allows people to apply for debt relief if they believe their college misled or defrauded them.
“My administration won’t stand for colleges taking advantage of hardworking students and borrowers. As long as I am president, we will never stop fighting to deliver relief to borrowers who need it – like those who attended Ashford University,” Biden said in a statement.
The Department of Education found that Ashford University made “numerous substantial misrepresentations” to borrowers between March 1, 2009, and April 30, 2020. The school is now known as the University of Arizona Global Campus.
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.
“As the California Department of Justice proved in court, Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” James Kvaal, the US under secretary of education, said in a press release.
Borrowers whose debt relief applications have been approved due to this action can expect to receive an email in September. They will not have to make any payments on the loans being discharged when monthly payments resume in October after the expiration of the pandemic-related pause.
Last year, Biden announced a plan to cancel up to $20,000 of federal student loan debt for low- and middle-income borrowers. The proposal would have forgiven roughly $420 billion for tens of millions of borrowers, but it was knocked down by the Supreme Court and never took effect.
The Biden administration has been successful in other efforts to provide narrower student debt relief. Not only has it made it easier to apply for debt cancellation under the borrower defense program, but it also expanded eligibility for the Public Service Loan Forgiveness program, which wipes away outstanding debt for public sector workers after they make 10 years of qualifying payments.
In August, the administration launched a new income-driven repayment plan, known as SAVE (Saving on a Valuable Education), that will reduce monthly payments and the amount paid back over time for eligible student loan borrowers.
