On August 30, 2023, the Biden administration took another significant step towards addressing the burdensome student loan crisis in America. They announced the forgiveness of $72 million in student loans for more than 2,300 borrowers who had once attended the online for-profit institution, Ashford University. These borrowers have been granted relief under the Borrower Defense to Repayment (BDRP) program, a safety net for those who felt that their college had misled or defrauded them.
The Backstory of Ashford University’s Misrepresentation
Ashford University, based in San Diego, was known for its online educational programs. However, between 2009 and 2020, the institution was found guilty of making significant misrepresentations to its students. These included misleading information about the school’s accreditation status, exaggerated job placement rates, and false promises regarding the transfer of credits.
Such misinformation can be detrimental. Prospective students make crucial decisions based on such data, assuming they will receive a quality education and that their degree will open doors to employment opportunities. When these expectations are not met due to deception, students are often left with hefty loans without the anticipated ROI (return on investment).
Automatic Loan Discharge for Approved Borrowers
The affected borrowers of Ashford University won’t have to navigate a complicated process to have their loans forgiven. Their loans will be discharged automatically, with no further payments required on the discharged amounts. The Department of Education will roll out notifications to all qualified borrowers for the borrower defense discharge in the forthcoming month of September.
A Pattern of Relief: Biden’s Actions on Student Loan Forgiveness
This latest announcement is part of a broader effort by the Biden administration to tackle the overwhelming student loan debt crippling many Americans. In April 2022, a massive $1.7 billion in loan forgiveness was announced for students of Corinthian Colleges, another institution that operated for-profit. Similarly, in December 2021, students of ITT Technical Institutes were the beneficiaries of a whopping $5.8 billion in loan forgiveness.
Beyond these specific institutional reliefs, the Biden administration has floated the ambitious proposal to forgive a general $10,000 in student loan debt for borrowers. However, this broader plan awaits finalization.
Conclusion: A Significant Relief and a Hopeful Future
The forgiveness of $72 million in student loans is undoubtedly a huge financial relief for the affected borrowers. It’s a sign that the current administration recognizes the magnitude of the student loan problem and is willing to take decisive action. While these measures specifically target students of for-profit institutions found guilty of misrepresentation, they are also indicative of a larger commitment to reform and address the student loan system in the country.
