The U.S. Department of Education has decided it will not try to recoup millions of dollars from the University of Arizona over borrower-defense claims tied to Ashford University, ending a long-running financial threat to the school’s online operations.
Rhonda Shaffer, in a letter obtained by the Star through a public records request, said the department has discretion in whether to recoup discharged loan amounts and said it would not collect from the university on the Ashford claims. The decision removes the risk that the school could have been pulled into a federal effort to recover money linked to a loan discharge that has already grown to $4.5 billion for 261,000 borrowers.
The Education Department first said in 2023 that it would discharge $72 million in student loans for borrowers who attended Ashford, and a senior official said that year the department would seek to recoup funds from the current owner as well as whatever it could get from Zovio. Zovio wound down in 2022. The department later expanded the relief, saying in 2025 that it would wipe out loans for borrowers who attended Ashford between March 2009 and April 2020, after accusing the school of deceptive recruiting tactics and a low graduation rate.
The recoupment question mattered because the case has never been just about old loans. It traces back to the University of Arizona’s purchase of Ashford’s online college in a complicated and controversial deal more than five years ago, one that has kept the school tied to the legacy of its former parent even as it has worked to deepen the role of UAGC and centralize online operations. The department’s review of Ashford and Zovio also followed California’s successful lawsuit against Zovio, which resulted in $22.4 million in civil penalties for misleading students.
University of Arizona President Suresh Garimella welcomed the department’s decision, saying, “We appreciate the Department’s actions to clear these hurdles and are grateful for the advocacy of our federal delegation.” He added, “This resolution provides certainty as we continue to integrate UAGC as a vital part of our institution.” The department last year approved the university’s application to integrate UAGC into the university and recognized the online unit as a public institution under the Arizona Board of Regents.
The outcome gives the university what it had been seeking while it brings together key functions of Arizona Online and UAGC and prepares for Frank Dooley, the former chancellor of Purdue Global, who was announced in March to lead the online initiatives. For the university, the ruling closes one more chapter in the Ashford dispute; for everyone still attached to the case, it leaves the old borrower-defense fights where the department has now decided they belong.