Judge Threatens Jail in Student Loan Case
Published October 16th, 2019

Betsy Devos could face jail after judge rules she violated 2018 order on student loans. 

She has been threatened with the possibility of jail after a judge deemed she was violating a court order for continuing to collect student debts on a now-defunct school.

To shed some light on how this came to be (as stated by Forbes.com), in 2016 the Obama administration finalized rules for the Borrower Defense to Repayment program. This program was created to allow federal student loan borrowers to request loan forgiveness on the basis that their school engaged in unfair, deceptive, or illegal practices. When DeVos took over the U.S. Department of Education in 2017, she stopped processing Borrower Defense applications, and ordered the department to rewrite the rules governing the program, effectively gutting it.

Consumer advocates filed suit against her and the Department, and they won. As part of the 2018 court ruling on the collapse of for-profit college chain Corinthian Colleges, the federal judge ordered DeVos and the Department of Education to cease all collections activities on federal student loans used to attend Corinthian schools, given that they would likely be eligible for discharge under Borrower Defense to Repayment.

DeVos ignored the ruling, and the Department of Education continued to pursue defaulted former Corinthian students. The Department continued to garnish people's wages and intercept their federal tax refunds, depriving them of critical sources of income in direct violation of the 2018 court order.

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