DeVos Held In Contempt For Violating Federal Judge’s Order On Student Loan Collection

Education Secretary Betsy DeVos was held in contempt of court on Thursday and fined $100,000 fine for violating a federal court order instructing the Department of Education to stop collecting on the student loans owed by students of a defunct for-profit college, Politico reported Thursday.

As Politico noted, the “exceedingly rare judicial rebuke of a Cabinet secretary” came after the Trump administration admitted last month that it had erroneously collected on the loans of some 16,000 borrowers who attended Corinthian Colleges despite being ordered to stop doing so.

The Education Department had incorrectly informed the borrowers that they owed a payment on their debt after the court order and garnished the wages of 1,800 students. They also admitted to mistakenly subjecting 800 victims to adverse credit reporting.

U.S. Magistrate Judge Sallie Kim wrote in her court order Thursday that “the evidence shows only minimal efforts to comply with the preliminary injunction” she issued in May 2018 ordering the department to stop its collection of the loans.

“There is no question” that DeVos and the department violated the preliminary injunction and “also no question that defendants’ violations harmed individual borrowers,” she wrote.

Judge Kim ordered that the $100,000 fine go to a fund held by the former Corinthian students’ attorneys.

Toby Merrill, the director of Harvard Law School’s Project on Predatory Student Lending, which represents the former Corinthian students in the lawsuit, praised today’s decision.

“It’s a rare and powerful action by the court to hold the secretary in contempt,” she said.

“And it reflects the extreme harm that Betsy DeVos and the Department of Education have caused students who were already defrauded by a for-profit college.”