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Betsy Devos held in contempt for defying court order on collecting student loans

DeVos was ordered to stop collecting loans students took out from a for-profit college chain. She defied the order.

By Emily Singer - October 25, 2019
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Betsy DeVos

Education Secretary Betsy DeVos was hit with a fine for contempt of court on Thursday, after a federal judge ruled that she defied a court order to stop collecting loans students took out to attend a shuttered for-profit college chain.

The New York Times reported that Judge Sallie Kim slapped DeVos with a $100,000 fine — which will be paid out to students who were defrauded by Corinthian Colleges, a chain of for-profit colleges that went defunct in 2014.

A court had previously ruled that Corinthian College defrauded more than 60,000 students by using fake job placement rates to convince them to attend the school.

However, DeVos had created a new system for students to apply for loan forgiveness, misusing data from the Social Security Administration to claim the students didn’t qualify for loan forgiveness. Kim found that system was illegal, and ordered the Department of Education to stop using it.

However, the Department of Education — helmed by DeVos — continued to collect on the student debt for at least 16,000 people who were not supposed to have to pay back the loan.

The Department of Education’s Chief Operating Officer Mark Brown said in a video statement on Twitter that the department “mistakenly” collected on loans from 16,000 people, and that they are “disappointed” in the court order.

“Although these actions were not done with ill intent, students and parents were affected and we take full responsibility for that,” Brown said in the video.

But Kim viewed the situation differently.

In her order, she wrote that the Department of Education made “only minimal efforts to comply” with the loan repayment order, and “harmed individual borrowers who were forced to repay loans,” according to the New York Times.

Thousands of the students impacted had garnished wages or impacted credit scores thanks to Devos defying the court order.

This is yet the latest move by the Trump administration to punish or harm average Americans, a list that includes students receiving free or subsidized lunches, and poor families relying on Medicaid for health care.

Published with permission of The American Independent Foundation.


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