Betsy DeVos in Trouble for Violating Student Loan Court Order

U.S. Magistrate Judge Sallie Kim has found that Secretary of Education Betsy DeVos violated her court order to stop going after the debts of former students of defunct Corinthian Colleges. Instead, DeVos continued telling them to make payments toward debt they had accrued. There would be nothing unusual about this if the school was still operational. However, the school had already shut down.

In addition, the judge had ordered DeVos to stop attempting to collect on that debt. According to news sources, she violated the order up numerous times. According to Kim, “There have to be consequences for violation of my order sixteen thousand times.” This could get DeVos some serious jail time. Even if she doesn’t go to prison, she will likely have to pay some steep fines.

Gavel and two law books on wooden table.

The Court Order Violation

The judge stated that DeVos had ignored the court order and continued to deny at least 1,800 people wages or tax refunds. This case dates back to 2015, when Corinthian filed for bankruptcy amidst investigations. Corinthian was then ordered to cancel the debts of up to 335,000 students because the school was defunct. Under the Borrower Defense to Repayment Program, these students were no longer required to pay any of their debt they may have owed to Corinthian.

This all changed when DeVos took over the Department of Education. After she became the Secretary of Education, many former Corinthian students began to see wage garnishment and denial of tax refunds. They also received numerous letters requesting they repay their debts. Keep in mind, the students hadn’t graduated, and the school had filed for bankruptcy, then shut down.

Betsy DeVos and the people within her department even ignored upward of 160,000 petitions for student loan forgiveness under the program.

Potential Repercussions for Betsy DeVos

Betsy DeVos is currently in contempt of court for repeatedly refusing to comply with court orders. For a start, she is looking at having to pay fines for her actions—around $100,000. Judge Sallie Kim was incredibly frustrated with DeVos’ actions, stating “At best it is gross negligence, at worst it’s an intentional flouting of my order.” The judge has even threatened DeVos with jail time, though that possibility has not been put on the table yet.

What is The Borrower Defense to Repayment Program?

In an ideal world, colleges would all be virtuous institutions dedicated to higher learning and the betterment of their students. Unfortunately, sometimes certain colleges violate laws at the expense of the students they’re meant to serve. To protect students from predatory or negligent schools, the Department of Education created a federal loan relief program.

The Borrower Defense to Repayment program helps students who were misled by their colleges. It also helps those whose colleges broke the law or shut down. It makes it easier for students to receive student loan forgiveness. This help comes primarily in the form of student loan relief.

The Corinthian Colleges underwent several intense investigations relating to false and predatory advertising, a fraudulent loan program, and accreditation issues. In April of 2015, all American campuses were shut down and became defunct. At that point, former students would be protected from repaying certain student loans under the Borrower Defense program.

Use College Raptor to discover personalized college matches, cost estimates, acceptance odds, and potential financial aid for schools around the US—for FREE!

Related Articles

Leave a reply

Your email address will not be published. Required fields are marked *

Subscribe!