The federal government has dropped efforts to get the University of Arizona to pay $72 million to cover student loan debt canceled for students who said they were defrauded by the former Ashford University, a private, for-profit online school that UA bought.
UA President Suresh Garimella says the U.S. Education Department has “resolved all legacy financial matters” connected to the 2020 acquisition of Ashford, which UA transformed into the public, nonprofit University of Arizona Global Campus or UAGC.
In a letter to Garimella, an Education Department official wrote: “The Department has determined that it is not appropriate to bring a recoupment action against Ashford University, and thus the University of Arizona Global Campus, for the $72 million in loan discharges granted in August 2023.”
The U.S. Education Department has “resolved all legacy financial matters” connected to the 2020 acquisition of Ashford University, a private, for-profit online school that the University of Arizona bought, says President Suresh Garimella.
The official, Rhonda Shaffer, who is with the Office of Federal Student Aid, wrote that the department has discretion on whether to initiate a proceeding to collect payback. The Star obtained the Dec. 8 letter Wednesday from UA after filing a public records request.
The Education Department, under the Biden administration, had said in August 2023 that it would move to recoup the $72 million from the UA after the government canceled student loan debt for 2,300 Ashford borrowers.
The cancellation came after a California court found in 2022 that Ashford frequently lied to students to get them to enroll and that its recruiters misled students about the college’s accreditation, costs and the amount of time it would take to graduate.
UA officials said at the time that the university was not responsible, directly or indirectly, for the actions by Ashford and its parent company, Zovio Inc., which occurred before UA acquired the online school. Zovio and Ashford retained all liabilities associated with Ashford’s operation prior to the sale, the UA said.
On Tuesday, the Education Department, now under the Trump administration, told the Star, “While previous leadership alluded to a $72 million fine, the Biden Administration never actually fined UAGC nor moved to recoup the funds.”
In response to the Star’s questions, UA spokesperson Mitch Zak said in an emailed statement: “No settlement payments were made as the U.S. Department of Education determined that borrower defense recoupment was not appropriate and formally declined to pursue further action."
“That decision provides important clarity and affirms the standards under which the University of Arizona Global Campus has operated since coming under university ownership," Zak wrote. "We are grateful to members of the Arizona congressional delegation for their engagement on this issue. With this matter resolved, the University of Arizona is focused on expanding access to high-quality, flexible online education and advancing our land-grant mission, supporting success for every student through career-connected pathways across Arizona and beyond.”
UAGC now integrated into the UA
Garimella also announced that UAGC is now integrated into the UA as an online school, instead of being a separate institution affiliated with the university.
An office building in Chandler houses offices of the University of Arizona Global Campus, an online school.
“We reached a major milestone in September 2025 when the U.S. Department of Education approved our application for UAGC to join the University of Arizona,” Garimella said in a March 27 news release. “By recognizing UAGC as a public institution under the Arizona Board of Regents, the department has cleared the way for UAGC to operate as an essential part of our university rather than as a separate organization.”
He also said that after a comprehensive review, a regional accrediting agency for higher education, the WASC Senior College and University Commission, reaffirmed UAGC’s accreditation in June 2025.
The accreditor had told UA in 2022 that UAGC would remain accredited, but with a notice of concern that it needed to improve its retention and graduation rates.
Controversial purchase
The UA, under President Robert Robbins at the time, acquired the then Ashford University under former parent company Zovio in 2020 for $1, gaining its 35,000 online students while adding approximately $265.5 million to UA’s operating costs.
UA faculty expressed disapproval of the purchase, noting Ashford had accreditation problems and had been sued by California for allegedly defrauding veterans and other students through misleading marketing and predatory loan practices.
But the Arizona Board of Regents, which oversees the UA, defended the purchase in a report to the governor, saying the financial and legal risks were known but were mitigated through financial, contractual and academic measures.
New leader, other changes
Garimella, in his recent announcement, said UA’s two online institutions, UAGC, which serves non-traditional adult learners and working professionals through flexible, accelerated academic programs, and Arizona Online, the primary pathway through which people can get online access to UA’s academic programs, will integrate their service centers and marketing brand to reduce duplication and confusion.
The structural changes Garimella announced include:
- A unified online service center: The UA will bring together many key functions of online education from both Arizona Online and UAGC to form a unified service and remove existing barriers between the two.
- One online brand: The UA will merge all online marketing into UA’s marketing and communications under Chief Communications and Marketing Officer Johnny Cruz so prospective students have one source of information for all programs and market confusion will be eliminated.
- Data and AI readiness: The university will align all online marketing and program data to make sure AI tools and search engines have a single, primary source of information.
Additionally, UA’s online brand will now have a new interim leader at its helm. Gary Packard, the interim senior vice provost of online initiatives, will be stepping away from this role and Frank Dooley, the former chancellor of Purdue Global, will be coming in to oversee online initiatives.
Garimella said Packard, who was the founding dean of the College of Applied Science and Technology, will return to a faculty role.
Dooley came to the UA in November as special advisor for online initiatives and will now oversee its online initiatives in an interim role, along with other administrators working in Arizona Online and UAGC.
He will serve as the bridge until a permanent leader for UA online education is selected through a global search, Garimella said.
