Betsy Devos Found in Contempt of Court For Student Debt Collections
“The judge is sending a loud and clear message: Students have rights under the law and DeVos’ illegal and reckless violation of their rights will not be tolerated.”
A federal judge on Thursday held Education Secretary Betsy Devos in contempt for violating an order to stop collecting student loans from defunct, fraudulent for-profit education network Corinthian Colleges. Even though Devos had been warned to stop targeting defrauded borrowers, Judge Kim Sally found that “defendants have not provided evidence that they were unable to comply with the preliminary injunction, and the evidence shows only minimal efforts to comply.”
Critics argued the uncommon nature of the contempt ruling is demonstrative of Devos’ unique determination to fight for predatory for-profit colleges and persecute defrauded students.
“Secretary @BetsyDeVosED is such a failure at @usedgov that she may be held in contempt for refusing to follow the law & stop punishing scammed students,” tweeted Sen. Elizabeth Warren earlier this month. “Think about that: she’d rather risk sanctions or even jail than do her job to help America’s students.”
The judge hit the Education Department with a $100,000 fine for the violation. The money will be used on the 16,000 people harmed by the Education Department’s actions, including defrauded students who had their paychecks garnished and others who had their tax refunds seized to pay the fraudulent creditors.
“Thousands of students illegally had their tax refunds seized and wages garnished, and the Department still can’t identify all of the affected students nor refunded the money,” Toby Merrill, director of Harvard Law School’s Project on Predatory Student Lending, a group which represented the defrauded students, told the Washington Post. “The judge is sending a loud and clear message: Students have rights under the law and DeVos’ illegal and reckless violation of their rights will not be tolerated.”
As Citizen Truth previously wrote, the Trump administration’s Education Department is full of veterans from the for-profit education industry, which critics argue has repeatedly demonstrated a willingness to flout education standards and deceive students:
“The for-profit college industry has taken heavy criticism in recent years, with over 1000 campuses closing in the past five years, leaving hundreds of thousands of students in severe debt and with unusable degrees. A study from Pew Research Center released in May found that the predatory lending and false advertising of for-profit colleges disproportionately hurts impoverished students, with the schools holding a higher percentage of enrollees in poverty than any other form of higher education.”
The news comes a day after top Education Department official Arthur Wayne Johnson resigned, describing America’s higher education system as “fundamentally broken” and calling for the forgiveness of hundreds of billions in student loans.
“When … somebody has $40,000 in student loan debt and, because of forbearances or deferments and the accrual of interest, they wind up with $120,000, you have to step back and say this is fundamentally broken,” said Johnson. Johnson advocates forgiving $50,000 in debt for all borrowers and provide people who have already paid back their debt a $50,000 tax credit. The policy would wipe out more debt than Sen. Elizabeth Warren’s student loan plan, but less than Sen. Bernie Sanders’ proposal to erase the entire $1.6 trillion sum.