A hearing is being held today to determine whether Betsy DeVos, the Secretary of Education, should be held in contempt of court for allegedly continuing to collect on loans made to former students of the bankrupt, for-profit Corinthian College, in violation of a court order prohibiting those collection efforts.
The Education Department conceded in a court filing last month that more than 16,000 former Corinthian students were told they had payments due on their student loans after the court-ordered prohibition went into effect in May 2018. Nearly 2,000 of those individuals had wages or tax returns garnished to collect on those unpaid student loans, but the Education Department said it has ceased collection efforts on about 15,000 of those accounts.
Corinthian College was a for-profit university that shut down in 2015 after allegations that it targeted low-income individuals by making false representations about job placement rates. Students were saddled with student loan debts that they could not afford to repay.
Back in December 2017, the Education Department agreed to provide debt relief to former students at Corinthian by comparing the average earnings of individuals in similar vocational programs. That information was collected under a regulation that penalizes for-profit colleges for “graduating” individuals with more debt than they can repay, and is not intended to be used to evaluate for-profit vocational programs.
“Secretary DeVos continues to show that she thinks she and the Department of Education are above the law,” said Toby Merrill, director at the Project on Predatory Student Lending, a legal-aid group representing the students, in a published report. “Let’s be clear about the facts: The department admitted that it blatantly violated a court order that we won.”
