Allied American University 
Misleading Practices, School Closure,
and Your Right to Loan Forgiveness

If you attended Allied American University (AAU)—a now-defunct for-profit school based in Laguna Hills, California—you may be eligible for full federal loan forgiveness through a Borrower Defense to Repayment (BDR) application or a Closed School Discharge.

AAU abruptly closed its doors in 2016, leaving many students without a degree, mounting student debt, and no path to transfer credits. If you were one of them, it’s time to take action—and we’ll show you how.

AAU's Closure and Borrower Rights

AAU’s shutdown qualifies many former students for Closed School Discharge, especially if you were enrolled within 120 days of the closure and didn’t complete your program elsewhere.

However, if you were misled about job prospects, program costs, accreditation, or credit transferability, you may be eligible for Borrower Defense—which offers broader forgiveness based on misconduct, not just school closure.

See how Closed School Discharge works →

What Went Wrong at Allied American University?

Allied American University operated under the broader umbrella of Allied Business Schools, Inc., a for-profit institution that offered online degree and certificate programs marketed heavily to veterans and working adults. Key issues include:

• ❌Aggressive marketing to military students using GI Bill funds
• ❌Poor credit transferability, leaving students unable to continue education elsewhere
• ❌No clear career placement services, despite advertising job-ready outcomes
• ❌Accreditation concerns and limited recognition in the job market
• ❌Sudden closure in 2016 without adequate teach-out or transfer options

These issues align with patterns seen in many for-profit institutions targeted in federal investigations.

Were You Misled by Allied American University?

You may qualify for Borrower Defense loan discharge if:

• You were told your degree would lead to specific jobs, but it didn’t
• You were promised transferable credits or accreditation that never materialized
• You were led to believe you’d receive job placement assistance—but got none
• You were pushed to enroll quickly under misleading pretenses

AAU & Military Student Concerns

Like many other for-profits, AAU targeted military service members and veterans. It relied heavily on GI Bill funding and was known to aggressively recruit students without fully disclosing the school's poor outcomes. These practices mirror those that led to multi-million dollar settlements at similar schools such as ITT Tech and DeVry.

See Other Schools with Legal Problems

If you attended any of the schools listed here, you may be eligible for Borrower Defense. Link your experience to one of these deep dive articles:

1. American Intercontinental University Under Fire
2. Sanford-Brown’s Legal Turmoil
3. Lincoln Educational Services Legal Battles
4. University of Phoenix  and Corinthian Colleges  Lawsuits
5. ITT Technical Institute’s Legal Turmoil
6. DeVry Scandals
7. The Legal Legacy of Westwood College
   and many more …

What You Can Do Now

Option 1

File a Borrower Defense application if you believe AAU misled you.
Option 2

Check your FREE eligibility if you’re not sure!

Option 3

Do It Yourself: We’ve built a comprehensive, step-by-step Borrower Defense DIY Guide to help you through the application process. It’s free, simple, and written for everyone.

🎯 Need help? Learn Why Use Us or go straight to our contact page: Contact Us

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