Federal Judge Rules Education Secretary Betsy DeVos In Contempt Of Court
A federal judge ruled that Secretary of Education Betsy DeVos is in contempt of court. The federal judge imposed a fine of $100,000 on the Education Department that is headed by Devos. The judge found that the Education Department continued to collect loans from former students of Corinthian Colleges in spite of the court’s orders in 2018 to stop collection. The orders were announced in 2018 only after a class-action lawsuit was filed by aggrieved students in 2017.
The origin of the class action suit stems from Corinthian’s false claims. Corinthian ran a chain of for-profit-schools. It attracted students after displaying grandiose and inaccurate statistics. Corinthian falsely inflated their job placements and lured students with fake promises.
According to the rules of the Education Department, students must be refunded the money they borrowed when enrolling at Corinthian. The former students claimed in court that the department had not reimbursed them and instead sent notices to 16,000 borrowers, asking them to repay the loans.
The Education Department assigned ten collection agencies to follow up on the students. Some students paid up. The others that didn’t comply were penalized. Money was either deducted from their wages or tax refunds were taken away from them by the department.
The Education Department has said that it regretted the court’s decision. It put out a statement apologizing for the mistakes committed by their loan service agents.