Betsy DeVos and her Department of Education (DOE) got smacked down Thursday by a federal court. When last we left DeVos, she was violating a court order by having the DOE collect student loan payments from borrowers who had been defrauded by fake colleges. Students swindled by for-profit diploma mill Corinthian College sued and won. The court found – and DeVos herself admitted – that some of these students paid dearly for programs that were “worthless.” Now, DeVos is being called to account.
As a result of a class-action lawsuit, Corinthian is defunct, students have been vindicated, and the court has ordered the DOE to refund loan payments. It also issued an injunction for the DOE to stop attempting to collect loan payments from individuals who were victimized.
Apparently, though, things at the DOE are a little disorganized; even after losing in court, and being specifically ordered to cease collection efforts, the DOE didn’t stop. It attempted to collect from nearly 75,000 student borrowers who attended various campuses owned by the Corinthian Colleges chain. On Thursday, the court slammed DeVos with a contempt finding and corresponding $100,000 fine.
— Project on Predatory Student Lending (@EdDebtJustice) October 24, 2019
Finding DeVos in contempt, the court noted that DOE made only “minimal efforts” to follow the order:
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.
At the risk of stating the obvious, it’s really not a good look for a cabinet secretary to be held in contempt of court.
Likely, though, DeVos is celebrating the relative leniency of the court’s order. At a past hearing on DeVos’s noncompliance, U.S. Magistrate Judge Sallie Kim said she was “astounded” to discover that the DOE had continued to seek repayment from over 16,000 former Corinthian students. Judge Kim even mentioned the possibility of jail time for DeVos as a consequence for the education secretary’s “intentional flouting” the court’s order. Viewed in that light, a $100,000 fine – and one payable by the department itself and not DeVos individually—is pretty lightweight.
Attorney Toby Merrill is the director of the Project on Predatory Student Lending at Harvard University, who initiated the class action lawsuit on behalf of 80,000 affected students against the Education Department. About the court’s contempt ruling, Merrill commented, “Taking this rare and powerful action to hold the Secretary of Education in contempt of court shows the extreme harm Betsy DeVos’ actions have caused students defrauded by for-profit colleges.”
Following the hearing, the Education Department said: “We’re disappointed in the court’s ruling.”
We’re disappointed in the court’s ruling. We acknowledged that servicers made unacceptable mistakes. @BetsyDeVosED directed @FAFSA to take immediate action to help every impacted borrower. As of today, @FAFSA has taken the actions needed to make every impacted borrower whole. pic.twitter.com/10kgh63bhH
— U.S. Department of Education (@usedgov) October 25, 2019
[Image via Mark Wilson/Getty Images]