During the Obama administration, Congress passed legislation to protect students who had been defrauded by for-profit colleges. In most cases, the “colleges” made claims about their success in placing their graduates in jobs. As a result of these misleading claims, thousands of students paid for a worthless degree. The Education Department attempted to help them get restitution. The Education Department was on the side of the victims of predatory colleges.

But times change, and now Betsy DeVos is in charge. In the past, she has invested in for-profit colleges. She has no sympathy for students who were defrauded. She thinks they are trying to get free money, and she has dragged her heels. Clearly she sides with for-profit colleges, not students.

A lawsuit was brought against the Department of Education for sending debt collectors to hound students who had been defrauded. The judge in the case, Judge Sallie Kim, fined the U.S. Department of Education $100,000 after ED admitted that it attempted to collect on debts owed by 16,000 students. For some unknown reason, the $100,000 was supposed to help those students, but each one would receive just a few dollars, maybe enough for a cup of coffee.

After the fine was imposed and DeVos was held in contempt of court, the Department announced that it had sent debt collectors to yet another 29,000 students (well, now that $100,000 fine amounts to about $2 for each defrauded student).

Despite the fine and the court order, the Department admitted that it continued to pursue students at late as last month.

Now Judge Kim must decide how to deal with the contemptuous, possibly criminal activities of the Department of Education. 

A federal judge is weighing higher fines for the Education Department after the federal agency disclosed that it pursued scores of additional borrowers for debt collection — violating a court order.

Magistrate Judge Sallie Kim of the U.S. District Court in San Francisco agreed this week to consider a request by former Corinthian Colleges students to increase the $100,000 fine she levied against the department in October. The judge imposed those sanctions and held Education Secretary Betsy DeVos in contempt for pursuing loans owed by 16,000 students from the defunct for-profit chain despite a May 2018 order halting collections.

In December, the Education Department revealed in a court filing that it identified another 29,000 people who were pursued for loan payments. The agency also informed attorneys for the students that it never fully ceased collections and went after at least 21 people for payments as recently as last month…

Attorneys for the Corinthian students have argued that the department’s continued violation of the order warrants harsher penalties. Hundreds of people lost wages or tax refunds because of the collection practice, while thousands of others were hit with negative marks on their credit reports. Some people who lost wages told attorneys that their utilities were cut off or they faced eviction.

The Education Department has collected more than $20 million from Corinthian students represented in the class-action case. It has yet to refund all of the money.

Money from the $100,000 fine was meant to provide redress for 16,000 borrowers, but because 45,000 people were affected, attorneys say far more compensation is needed….

The ongoing dispute stems from a class-action lawsuit filed in 2018 by the Project on Predatory Student Lending at Harvard University and the Housing and Economic Rights Advocates on behalf of Corinthian students. The groups alleged DeVos had illegally limited loan forgiveness due to students under a statute known as borrower defense to repayment.

Kim agreed the Trump administration violated privacy laws by using Social Security Administration data to calculate loan forgiveness. She banned the Education Department from using the earnings data to grant partial student debt relief to Corinthian students and halted collection on their loans.

DeVos has cited the ruling as the reason the department sat on nearly 300,000 borrower defense claims for more than a year. The department began clearing the backlog in December after updating its methodology with a sliding scale based on a borrower’s wages to determine loan forgiveness.

In other words, DeVos took the position that if the student was defrauded but was earning money, the student could not recover the money spent on a worthless degree.

The judge has the power to increase the fine the Department must pay, which means that we the taxpayers have to pay for DeVos’ efforts to protect the predatory colleges and persecute the defrauded students.

Peter Greene wrote about this controversy here.

G.F. Brandenburg wrote about it here. 

Brandenburg says he hopes DeVos goes to jail.

Clearly the judge will not fine her personally.

The students should be paid back.

I agree with Brandenburg: DeVos should go to jail for her ruthless indifference to the plight of students who were defrauded and were supposed to be protected.