Billionaire daughter-in-law to the Amway fortune Betsy DeVos probably contracts with the U.S. Mint to exclusively reissue $100,000 bank notes so she can light them on fire to light candles in her office. But she’ll have exactly one less, after a federal judge in San Francisco fined her exactly that amount, because the Education Department continues to collect on fraudulent loans issued to students of shady for-profit college network Corinthian Colleges.
Around 16,000 students have been affected by DeVos collecting on illegal loans, so that’s $6.25 each. Nevertheless, seeing any personal liability at all for an Education Department that not only failed to stop Corinthian from lying to students and saddling them with debt for worthless diplomas, but then kept trying to squeeze those students for unlawful payments, must offer at least a little solace. The Education Department resisted compensating Corinthian students at all, until they went on a debt strike. Under Arne Duncan, students ripped off by for-profit colleges were allowed to assert “defense to repayment” to get the loans canceled.
That process moved at turtle-like speed, with only one-fifth of Corinthian students made whole by the time DeVos took over. She instituted hurdles to prevent loan forgiveness, which Judge Sallie Kim ruled unlawful. This ruling is stayed pending appeal, but DeVos’s department kept trying to collect loan payments anyway, despite the dispute. Three thousand borrowers made these payments. The Education Department even garnished wages on 1,800 students, which it had no right to acquire.
Essentially nobody abused by Corinthian has had loans canceled during DeVos’s tenure. However, she has created momentum for mass loan forgiveness—inside her own department. A. Wayne Johnson, whom DeVos appointed as chief operating officer for the Office of Federal Student Aid, resigned this week, calling the system “fundamentally broken.” He’s now running for Senate (as a Republican) in Georgia, endorsing the cancellation of $50,000 in student-loan debt for every borrower, while adding a $50,000 tax credit for everyone who had already repaid their loans. This is a more robust student debt cancellation proposal than Elizabeth Warren’s (because it includes no means testing), from a Republican DeVos appointee who’s actually seen the student debt crisis up close. That’s how radicalizing it is. The way we finance higher education cannot sustain itself, and everyone to the left of Betsy Hundred Thousand DeVos ought to demand a reset.
Diane Ravitch's blog 
Americans pay the most for a college degree. It’s sick. Tuition costs for a college education in America took a huge HIKE when politicians and business folks became presidents of universities.
The system is CORRUPT.
Not really ‘when politicians and business folks became presidents of universities.’ Tuitions started spiraling upward in the ’80’s [my little sis’s rose 250% between 1980-1984, mostly due to inflation. In 1988, public colleges and universities received 3.2 times as much revenue from state and local governments as they did from students. 30 yrs later, they now receive about 1.2 times as much—less than half as much– from states and localities as from students. Basically each time there was a recession, states cut funding & tuition rose – then restored just some of funding when times got better—leaving tuitions already at a higher-than-should-be level when the next recession hit. That left us poised for a big spike in tuition when the Great Recession hit. Average state spending just since 2008 is down 20% – in 9 states 30%– meanwhile ave tuition for pubcolls is up 33% in same period.
“That process moved at turtle-like speed, with only one-fifth of Corinthian students made whole by the time DeVos took over. She instituted hurdles to prevent loan forgiveness, which Judge Sallie Kim ruled unlawful. This ruling is stayed pending appeal, but DeVos’s department kept trying to collect loan payments anyway, despite the dispute. Three thousand borrowers made these payments. The Education Department even garnished wages on 1,800 students, which it had no right to acquire.”
It bothers me that they’re a kind of clearinghouse for information that borrowers need. I don’t feel they work on behalf of student borrowers. I think the students need real advisers- people who are on their side instead of the side of the lender and the collection companies.
Maybe we could do some kind of volunteer program with real, adult advocates. College borrowers are so young. They’re so vulnerable to getting robbed. They need help and the first generation college students are the MOST vulnerable because their parents can’t help them navigate this maze. The people who need the help the most get ripped off most. It’s disgusting. It enrages me. Just brutally unfair to stick them in with these sharks.
“It bothers me that they [the DofEd] are a kind of clearinghouse for information that borrowers need. I don’t feel they work on behalf of student borrowers.” The problem is not structural when govt is operating as it is supposed to.
E.g., regular [non-private-tech/career institutes] student loans: the FAFSA loans for my eldest were @ 6.8%– about 40% above that period’s mortgage rates– because under Bush, student loans were privatized out to commercial lenders. About 1/2way through middle kid’s ed, the rate was cut to 3.4% [same or just under that era’s mortgage rate] & back under govt admin thanks to congressional action. That’s an example of govt operating as it should – correcting the neoliberal anti-public-goods path Bush admin sent us down.
RE: private career/tech institutes, they were always a dicey bet from way back [in my day it was ‘career correspondence schools’ advertised on the back of matchbooks]. They were always overpriced & overpromised, but it was private so “caveat emptor.’ Govt got themselves involved in accrediting such places & providing student loans, giving them a veneer of respectability & roping in many more students. But govt was not doing due diligence – perhaps on curriculum (?) but definitely not on financial viability. Obama set about righting that govt error– then DeVos turned that on its ear. Purposeful govt miscreance justified by neoliberal doctrine…
The US Department of Education did a focus on one student on their blog who sticks in my mind. He was getting some kind of culinary certificate to work in a restaurant. He was paying 29k a year for training at a private facility.
I mean, are these people FAMILIAR with Fort Wayne Indiana, where he works? They pay rock bottom wages. He won’t MAKE 29,000 a year.
This is BAD ADVICE.
Betsy should have pay all of those students loan for them out of her pocket. Then she should have to right each student a check for the same amount for pain and suffering she put them through.
My understanding is that if the fine is paid, it is paid from taxpayers’ Department of Education budget.
bingo: no personal pain for those who inflict it
The federal government should make public colleges and universities tuition free and eliminate the need for student loans.
The title of this post is profound. One example of a general phenomenon that has occurred throughout history.
The rich will continue pushing their toy until it breaks. One way to break it is to saddle a generation with 1.5 trillion in debt.
DeVos’ security detail, provided by the U.S. Marshals, is projected to cost almost $8 mil. for 2019. A contract for the U.S. Marshal’s for $33,000,000 was awarded to CentiPath, a company in which Trump’s brother is invested. The competing vendor filed an inquiry about the contract.