ED Drops Plans to Recoup $72M From University of Arizona

The U.S. Department of Education has pulled back a demand for payment from the University of Arizona to cover $72 million in loan debt canceled for students who claimed they were defrauded by Ashford University, The Arizona Daily Star reported. The University of Arizona purchased Ashford, a for-profit online institution, in 2020, and turned it into University of Arizona Global Campus.

The department began seeking to recoup funds in August 2023 after it cleared loans for 2,300 Ashford students who claimed the university misled them about the cost and value of degrees. At the time, University of Arizona leaders argued that they shouldn’t be on the hook for Ashford’s actions before the purchase.

But the Education Department has “discretion” over whether to pursue relief from the borrower-defense claim, read a December letter from an ED official to University of Arizona president Suresh Garimella, obtained by the Star through a public records request.

“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,” Rhonda Shaffer, the official from the department’s Office of Federal Student Aid, wrote in the letter.

Arizona spokesperson Mitch Zak wrote in a statement to the Star that the decision “provides important clarity and affirms the standards under which the University of Arizona Global Campus has operated since coming under university ownership.”

The University of Arizona also announced in March that it will be integrating UAGC with Arizona Online, rather than keeping it as a separate affiliated institution. UAGC’s accreditation was reaffirmed by WASC Senior College and University Commission last summer, according to the announcement.