Project on Predatory Student Lending Calls for DeVos to be Held Accountable for Illegal Collection of Bogus Student Debt | Press Release

September 19, 2019

CATEGORIES

Corinthian


 

BOSTON, MA – The Project on Predatory Student Lending today called for U.S Education Secretary Betsy DeVos and the U.S. Department of Education to be held accountable after she continued to collect on the student loan debt of thousands of former for-profit college students — a direct violation of a federal court order. DeVos and the Department admitted yesterday to such action in a court filing.

The court order and filing are part of a class action lawsuit on behalf Corinthian College students represented by the Project and HERA. Last year, the U.S. District Court in the Northern District of California ruled in favor of thousands of students by ordering DeVos to stop collecting the loan payments of thousands of students who were defrauded by for-profit colleges, including by Corinthian Colleges.

According to new numbers released in the filing, thousands of students were unnecessarily hurt by DeVos’ actions, in many cases impacting their financial solvency:

  • The Department demanded incorrect loan payment from 16,034 students
  • Of those students, 3,289 student borrowers made one or more loan payments because of these demands, which they were not actually supposed to pay
  • The Department has still not confirmed that 1,147 students’ loans are in the correct status, leaving those students in limbo
  • The Department has harmed the credit of 847 non-defaulted students
  • The Department subjected 1,808 students to involuntary debt collections (garnished their wages or taken their tax refunds or benefits)

Statement of Toby Merrill, Director of the Project on Predatory Student Lending

“Betsy DeVos continues to prove that her Department of Education skirts the law and epitomizes corruption. This action by the Department is an illegal and unacceptable breach of a court order that students won – and Betsy DeVos must be held accountable for violating students’ rights and pushing them further into debt they never should have had in the first place. This deeply disturbing violation must be investigated so the public and these students can get to the bottom of how it was allowed to happen – and can make sure it does not happen again.

“Sadly, this also is part of a pattern by Betsy DeVos and the Department. They callously strip away basic student protections and illegally collect on student loans, all while blaming the courts, blaming servicers, and blaming the students themselves. The fact is the Department has the authority and legal obligation right now cancel the loans of thousands of for-profit college students, and they have refused to do it at every turn. We urge DeVos and the Department to take responsibility, live up to their legal obligation, and cancel the loans of defrauded for-profit students right now.”

 

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