NCLC Statement in Response to Department of Education Loan Relief For Additional Students Harmed By Their School

January 16, 2025 — Press Release

WASHINGTON – Yesterday, the Biden administration announced that it will provide $5.75 billion in relief to over 345,880 borrowers with outstanding loans borrowed to attend Ashford University, Drake College of Business, and schools owned by the Center for Excellence in Higher Education (CEHE). The schools are accused of deceiving and misleading students regarding the cost of the programs and the success of graduates. 

This announcement adds to the group discharges the Department has provided over the last four years to students who were harmed by nine schools or school groups, providing approximately $24 billion of loan relief to 1.5 million borrowers. 

In response to the announcement, Kyra Taylor, staff attorney at the National Consumer Law Center issued the following statement: 

“Yesterday, the Department of Education took another step to ensure that hundreds of thousands of borrowers harmed by their schools’ misconduct would not be mired in debt for decades. These schools exploited students’ reasonable expectations that the government would not provide taxpayer dollars to institutions that would use misrepresentations, lies, omissions, and outright deception to boost their enrollment numbers and revenue. Yet, each of these schools received federal student aid for years, despite engaging in this misconduct. For decades, the federal government has failed to provide appropriate safeguards on the Title IV system and ensure that all of the institutions receiving taxpayer dollars in the form of student loans are honest and forthcoming with the students they enroll and deliver on the promises they make. 

“Millions of borrowers and their families have suffered the consequences, struggling for years or even decades with loans that never should have been issued and that they cannot afford to repay. Many of these loans went into default, leading borrowers to be sued and have portions of their wages, tax refunds, or federal benefits seized. 

“While the Department cannot give these students back the time they lost in low-value programs or years already spent suffering under the financial strain of unaffordable debt, yesterday’s actions will ensure that their loans will not continue to cause them financial hardship. As Congress considers ways to revise the Higher Education Act, we urge it to preserve safety nets that protect students from the burden of loans borrowed based on school lies and deception.”

Yesterday’s action will result in the discharge of all outstanding loans borrowed to attend the following schools during the following time periods:

• Ashford University between March 1, 2009 and April 30, 2020; 
• Schools owned by the Center for Excellence in Higher Education (CEHE) (CollegeAmerica, Stevens-Henager College, Independence University, and California College San Diego) between Jan. 1, 2006 and Aug. 1, 2021; 
• Drake College of Business between Jan. 1, 2008 and the school’s closure. 

In addition to discharging the loans, the Department of Education will delete the notation of these loans from the borrowers’ credit reports and refund all amounts paid to the Department. Borrowers will receive relief even if they have not submitted an application for a discharge program and do not need to do anything at this time to receive relief.

The Department found that these schools deceived prospective students to convince them to enroll. It found: 

• Ashford University misrepresented the cost of its programs and misled students about the terms of the federal aid they would receive, lied about whether its programs would qualify students for certain professions, misled students about their ability to transfer credits into and out of Ashford, and misrepresented how long it would take to complete an Ashford degree. 
• CEHE schools provided misleading employment rate information to prospective students and engaged in marketing that indicated students would earn more with a CEHE degree, even though they knew the actual earnings of their graduates were significantly less than average. 
• Drake College of Business recruited students from homeless shelters, misled them about whether graduates got jobs, and told students that they’d receive stipends when in reality they were signing up for student loans. 

Each of these schools enrolled large numbers of low-income students. In addition, Ashford University enrolled large numbers of veterans, servicemembers, and military spouses. 

Related Resources

• Student Loan Borrower Assistance Project
• Student Loan Toolkit, May, 20, 2024