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Betsy DeVos Held in Contempt, Fined for Collecting Student Loan Debt


 A federal court has held Education Department Secretary Betsy DeVos in contempt for illegally collecting student loan debt balances from Corinthian Colleges students.

The latest action stems from the 2018 court order in which the Education Department was directed to stop collecting the loan payments of thousands of students who were defrauded by for-profit colleges, including by Corinthian Colleges.

Corinthian Colleges operated dozens of campuses nation-wide, but after legal trysts with states and federal government, the for-profit higher education company announced the closure in 2015.

Last month, the Department acknowledged that it collected loan payment from 16,034 students, which was in direct violation of the court order.

On Thursday, a federal judge slapped the Department with a fine of $100,000 and sought monthly reports.

“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,” said Project on Predatory Student Lending Director Toby Merrill.

“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. 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.”

Earlier this month the Project on Predatory Student Lending filed a lawsuit against the Department of Education and its Secretary on the behalf of nearly 7,200 former Corinthian Colleges students in a Boston court for not providing debt relief.

The suit alleged department of ignoring Attorney General Maura Healey’s borrower defense application that sought cancellation of the students’ fraudulent loans.

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