Home / Compliance / Judge Declines to Hold DeVos in Contempt, But Blasts Ed. Dept. For Collecting on Prohibited Loans

Judge Declines to Hold DeVos in Contempt, But Blasts Ed. Dept. For Collecting on Prohibited Loans

A Magistrate Judge in California decided to delay a determination of whether to hold Education Secretary Betsy DeVos in contempt of court yesterday, but did say she was “astounded” at the “gross negligence” of the department in collecting on prohibited loans made to former students of Corinthian College.

“I’m not sure if this is contempt or sanctions,” U.S. Magistrate Judge Sallie Kim said yesterday, according to a published report. “I’m not sending anyone to jail yet, but it’s good to know I have that ability.”

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 a 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. 

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.

Lawyers representing the Education Department said the agency takes “full responsibility” for the mistakes and vowed “full compliance” with the judge’s order.

Judge Kim asked both sides to submit arguments that she will take into consideration before issuing a final ruling

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