The University of Arizona says it is not responsible, directly or indirectly, for the actions that led the Biden administration to cancel $72 million in student loans for borrowers who say they were cheated by Ashford University, an online school UA bought in 2020.
The U.S. Education Department announced Wednesday it will seek to recoup the money from the UA, which now operates the online school as the nonprofit UA Global Campus.
The UA countered in a written statement to the Star: "The University of Arizona had absolutely no involvement in, and is not directly or indirectly responsible for, the actions of Ashford and its parent company, Zovio Inc." on which the Education Department based its decision.
"These actions of Ashford and Zovio occurred well before The University of Arizona Global Campus (UAGC) acquired Ashford University," the UA said.
UA officials had no prior knowledge of Wednesday's federal announcement, which they are now reviewing to assess their options, the statement added.
Before its sale, Ashford was an online for-profit college owned by Zovio and based in San Diego.
A California court found in 2022 that Ashford frequently lied to students to get them to enroll. Its recruiters misled students about the college’s accreditation, costs and the amount of time it would take to graduate, the court concluded.
That lawsuit, brought by the state of California, was the basis of the Education Department’s cancellation, the Associated Press reported Wednesday.
The action will automatically discharge loans for 2,300 borrowers who attended Ashford from March 2009 through April 2020 and applied for cancellation through the Education Department’s borrower defense program. Those borrowers will see their loan balances zeroed out, and they will be refunded for payments on their federal loans.
According to Star archives, when the UA bought the school, as part of the asset purchase and sale agreement between Ashford, Zovio and the UA, Zovio agreed to pay any liabilities arising from Ashford’s operations prior to December 2020.
The UA said in its statement late Wednesday, "In 2020, The University of Arizona established UAGC as a non-profit Arizona corporation for the purpose of acquiring Ashford’s online university and operating it as an independent institution in affiliation with The University of Arizona. UAGC was governed by an independent Board of Directors and had new, well experienced senior leadership with no ties to Ashford or Zovio."
"With UAGC, The University of Arizona intended to help the former Ashford students by providing stability and continuity in their higher education journey and new leadership of high integrity and purpose. UAGC offered flexible and fully online higher education opportunities accessible to working adults, veterans, and active-duty military students," the university said.
After the UA bought the school, Zovio initially stayed on as a manager, but UA Global Campus and Zovio agreed to terminate their contract as of July 31, 2022, Star archives show.
The Arizona Board of Regents voted in June to approve the UA's full integration of UA Global Campus.
"Effective on June 30, 2023, The University of Arizona acquired the UAGC to further improve the education opportunities and outcomes of UAGC students by bringing them into one of the top public universities in the country," the UA's statement Wednesday said.
At the time of the board's June vote, the regents said the UA intended to “acquire substantially all of UAGC’s assets, assume substantially all of UAGC’s liabilities, and employ substantially all of UAGC’s faculty, staff, and administrators."
The UA and the UA Foundation previously signed an agreement with the U.S. Education Department that makes them “jointly and severally liable” for UA Global Campus’ performance.
UA Global Campus now operates as a separate business unit within the UA, and UA President Robert C. Robbins is accountable to the regents for its academic, financial and operational performances.
UA Global Campus has about 25,000 students. Its fiscal year 2024 budget is roughly $249.4 million and includes about $153 million for salaries and benefits. UA Global expects to net $231.1 million from its students during that year.
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