Betsy DeVos held in Contempt for failing to correct fraudulent federal student loan repayment practices
Back in 2015, Corinthian Colleges, Inc. was the largest of several for-profit college chains to cite wide-spread fraud and deception collection practices regarding repayment of federal student loans. By the end of 2017, a class action lawsuit was filed against the U.S. Department of Education (ED) effectively barring ED from trying to collect those student loans.
The class action suit by approximately 80,000 Corinthian students sued the Education Department, alleging that the body had ceased to forgive the loans. Instead of showing their compliance with the loan relief program, Education Department filings revealed that they instead were still pursuing students for loan repayment and had only pardoned 10 student loans. ~ Newsweek
ED demanded incorrect loan payments from 16,034 students. Of those students, 3,289 student borrowers made one or more loan payments because of these demands, which they were not actually supposed to pay.
At a hearing earlier this month, Judge Sallie Kim promised to rule on whether the U.S. Department of Education and Secretary Betsy DeVos will be held in contempt and face sanctions. She openly chastised the ED Secretary in court.
Kim said that “there have to be consequences for violation of my order sixteen thousand times.”
“The judge is taking this flagrant violation of borrowers’ rights extremely seriously, said Project on Predatory Student Lending Director Toby Merrill.
“Secretary DeVos has repeatedly and brazenly violated the court’s order by collecting for-profit college student debts and denying their rights. Thousands of former Corinthian students had their tax refunds seized and wages garnished despite a court order not to collect anything from them. This behavior is illegal and should not be tolerated by the court. We agree with Judge Kim that there must be consequences for these astounding violations and we look forward to the judge’s ruling.”
It all hit the fan yesterday, October 24, when U.S. Magistrate Judge Sally Kim ruled that Education Secretary Betsy DeVos and the Department of Education are in contempt of court for violating a federal judge’s order on student loans. The Judge ordered the Department of Education to pay $100,000 to a fund for the affected borrowers who attended Corinthian Colleges, according to CBS News
“Here, there is no question that defendants violated the preliminary injunction,” the judge wrote.
“There is also no question that defendants’ violations harmed individual borrowers who were forced to repay loans either through voluntary actions or involuntary methods (offset from tax refunds and wage garnishment) and who suffered from the adverse credit reporting. Defendants have not provided evidence that they were unable to comply with the preliminary injunction, and the evidence shows only minimal efforts to comply with the preliminary injunction. The court therefore finds defendants in civil contempt.”
Harvard lawyer Toby Merrill was confident earlier this month that a contempt ruling would in fact be levied against DeVos. The judge could also assign jail time to DeVos, although Merrill went on to tell Newsweek that the judge would be more likely, “to take actions such as imposing fines, ordering weekly update reports and assigning a judge to monitor further compliance.”
DeVos was nominated to the Secretary of Education post in 2016 by Donald Trump just prior to Trump assuming the Office of the President. She met strong opposition during the nomination hearings by the Democrats who felt she didn’t have the background or understanding needed for the role. In the end, it took Vice-President Mike Pence voting in her favor to break a 50 – 50 Senate tie.
~ Posted by: Richard Webster, Ace News Today / Follow Richard on Facebook and Twitter
