In a significant move to address the challenges faced by students defrauded by for-profit educational institutions, the Biden administration has announced the cancellation of $72 million in student loans. This relief targets 2,300 former students of Ashford University, a for-profit institution that faced allegations of issuing degrees without the necessary accreditation.
Ashford University's Controversy:
Ashford University came under scrutiny after being accused of misleading students about the cost of attendance and the duration required to earn their degrees. The court found the university guilty of misrepresenting these vital aspects, which adversely impacted the students who trusted the institution for their education. The Biden administration's decision to cancel the loans is a direct response to these allegations and the subsequent legal findings.
The Path to Loan Forgiveness:
While the Biden administration's broader efforts to cancel student loans faced hurdles in the US Supreme Court, the focus has now shifted. The administration is keen on targeting specific programs that benefit students who were misled by for-profit colleges. In the case of Ashford University, students who applied for borrower defense and were enrolled between March 1, 2009, and April 30, 2020, will automatically qualify for this loan relief.
The borrower defense to repayment is a provision that allows students to seek federal Direct Loan discharge if they can prove that their school engaged in misconduct related to their loan or the educational services they received. To apply, students must have a verified account on the Federal Student Aid website and provide evidence supporting their claim.
Reactions and Responses:
Rob Bonta, California's attorney general, responded to the announcement by emphasizing Ashford University's unlawful actions. He stated, "What Ashford University did to its students was morally reprehensible and unlawful." The California Department of Justice had previously sued Ashford, resulting in over $22 million in penalties.
James Kvaal, the undersecretary of education for the United States, also shed light on Ashford's deceptive student recruitment tactics. He emphasized the university's reliance on high-pressure and misleading recruitment methods.
Looking Ahead:
As the Biden administration and the Department of Education (DOE) continue their efforts to alleviate student debt burdens, they are actively exploring various methods to provide relief. The suspension of federal student loan payments, initiated by former President Donald Trump during the COVID-19 pandemic and continued by President Joe Biden, is one such measure.
Furthermore, the Biden administration is advocating for student loan repayment programs that adjust monthly payments based on factors like family size and annual income. These initiatives form part of a broader strategy to enhance the management of the student loan system, ensuring fairness and addressing the challenges posed by certain educational institutions.
