University of Arizona off the hook for $72M in discharged Ashford loans

Dive Brief:

The University of Arizona will not be financially liable for the $72 million in federal loans discharged by the federal government in 2023 for former students of Ashford University, which the public flagship acquired in 2020 and rebranded as University of Arizona Global Campus. 
In late March, university President Suresh Garimella said in an online update that the U.S. Department of Education “resolved all legacy financial matters stemming from conduct prior” to the acquisition of Ashford. The agency had accused Ashford of misleading students over costs and career outcomes. 
A letter recently obtained and published by the Arizona Daily Star elaborated on the Education Department’s decision. In it, an Education Department official told Garimella in December that the agency decided it was “not appropriate to bring a recoupment action against Ashford University, and thus the University of Arizona Global Campus.”

Dive Insight:

Ashford’s checkered history as a for-profit under former parent Zovio has haunted U of A since it acquired the online college through a complicated and controversial deal more than five years ago. 

In 2023, the Education Department said it would discharge $72 million in student loans of borrowers who had attended Ashford over borrower defense claims, which can provide debt relief for students misled or defrauded by their colleges. The department reviewed Ashford and Zovio’s recruitment practices after the state of California successfully sued Zovio, yielding $22.4 million in civil penalties for misleading students.

In 2025, the department discharged even more loans — to the tune of $4.5 billion across 261,000 borrowers who attended Ashford between March 2009 and April 2020, before the U of A acquisition. The Education Department accused Ashford of “deceptive recruiting tactics” and an abysmally low graduation rate. 

Zovio wound down in 2022, the year of the California ruling. At the time of the 2023 federal loan discharge, the Education Department under the Biden Administration suggested that it might ask U of A to pay for at least some of the recoupment amount.

“We will seek to recoup the funds from the current owner, as well as anything we can get out of Zovio,” a senior official told reporters at the time. 

Now, a little over a year into the second Trump administration, the department has backed off. In the letter obtained by the Star via a public records request, Rhonda Shaffer, acting executive director of enforcement and oversight in the department’s Federal Student Aid office, said that the department has discretion in whether to recoup discharged loan amounts. 

Shaffer offered no explanation when stating that the department wouldn’t collect from U of A on the borrower defense claims against Ashford. 

“We appreciate the Department’s actions to clear these hurdles and are grateful for the advocacy of our federal delegation,” Garimella said in March. “This resolution provides certainty as we continue to integrate UAGC as a vital part of our institution.”

The department last year also approved U of A’s application to integrate UAGC into the university and recognized the online unit as a public institution under the Arizona Board of Regents, according to Garimella.

That has helped pave the way for deepening UAGC’s role at U of A. The university plans to unify its marketing for Arizona Online, the online version of the flagship university, and UAGC, which is focused on career education and workforce development. Additionally, the university plans bring together key functions of both online units into a central service center.

Garimella also announced in March that Frank Dooley, former chancellor of Purdue Global — a similar entity at Purdue University fashioned out of the acquisition of a for-profit university — would be in charge of U of A’s online initiatives.