Student Borrowers Ask Court to Allow Deposition of Betsy DeVos on Borrower Defense | Press Release

January 11, 2021

New Evidence Shows that DeVos Personally Pushed Policies Delaying & Denying Borrower Defense Claims

 

BOSTON – Student borrowers today moved to depose former Education Secretary Betsy DeVos in the class action lawsuit Sweet v. DeVos. The borrowers want DeVos to explain the reasoning for delays in processing the borrower defense claims of more than 170,000 student borrowers who were cheated by their schools, as well as the thousands of form denials that the Department issued last year. Despite DeVos’ recent resignation, she can still be deposed as former Secretary of Education.

Judge William Alsup has already slammed DeVos’ blanket denials of borrower defense claims and rejected a proposed settlement in the case in an October ruling. The judge allowed the borrowers to take depositions of other officials from the Department of Education, but put off the question of deposing DeVos. Those already deposed include:

  • Diane Auer Jones, the Principal Deputy Under Secretary
  • Colleen Nevin, Director of Borrower Defense at Federal Student Aid (FSA)
  • Mark Brown, Chief Operating Officer of FSA
  • James Manning, former Acting Under Secretary of Education and former Acting Chief Operating Officer of FSA

None of the officials deposed have been able to explain the Department’s actions on borrower defense. They could not answer questions about the form denial letters, nor could they explain the Department’s years-long delay in reviewing borrower defense applications. Ms. Auer Jones, for example, insisted that she “did not know” who signed off on the blanket denial letters. Regarding the delays, Ms. Nevin suggested that borrower defense decisions could have been made sooner, but the choice of inaction was “related to a decision up the food chain.”

In the letter to the judge, borrowers argue that DeVos is the only person who can answer the court’s questions, writing:

All discovery thus far suggests that former Secretary DeVos drove the policies that caused the delay, developed and disseminated the pretextual excuses for the delay, and has knowledge about the development of the denial letters. Plaintiffs have not been able to get straight answers from her subordinates, and Plaintiffs and this Court deserve to know what really happened and why. As this Court recognized, “where there’s smoke, there’s fire.” All signs here point to former Secretary DeVos herself being the one striking the match.

Students in the case are represented by the Project on Predatory Student Lending and Housing and Economic Rights Advocates (HERA).

“The court has demanded answers to questions that it appears only Ms. DeVos can answer,” said Eileen Connor, Legal Director of the Project on Predatory Student Lending. “It has become evident that as Education Secretary, Betsy DeVos personally drove policies that delayed justice for students. She has the obligation to explain why defrauded student borrowers were ignored for years by the Education Department and then summarily denied their rights, and that obligation does not expire with her resignation. We will continue to stand with student borrowers to get them the answers and justice they deserve.”

 

Case Background:

Six students brought this lawsuit in June 2019. Immediately after filing the lawsuit, the students asked the court to let them represent all other former students whose claims for loan cancellation have stalled, with a motion for class certification. The motion included almost 900 affidavits from students describing the harm that the Department’s inaction has caused – with 96% saying their lives were made worse by attending school. In October 2019, the court certified the class of over 200,000 borrowers with pending claims. Many had been pending for more than four years.

The parties reached a settlement in April 2020 and received preliminary approval from the court in May 2020. The settlement agreement committed the Department to an 18-month timeline to issue a final decision on the more than 100,000 outstanding borrower defense claims, or else be required to cancel a portion of the borrowers’ student loans. However, starting in April 2020, the Department denied 94% of borrower defense claims without giving real reasons.

After the borrowers brought these mass denials to the court’s attention, the Judge ruled against the proposed settlement in October 2020. After the borrowers asked the judge to issue an injunction to stop the Department from issuing any further denials, and to vacate the tens of thousands potentially unlawful denials since June 2019, the Department agreed to stop issuing any denials while the case is pending, and to hold the loans of already-denied borrowers in continued forbearance while the case is pending.

For more information about Sweet v. DeVos, click here.

 

About the Project on Predatory Student Lending

Established in 2012, the Project on Predatory Student Lending represents former students of predatory for-profit colleges. Its mission is to litigate to make it legally and financially impossible for federally-funded predatory schools to cheat students and taxpayers. The Project has brought a wide variety of cases on behalf of former students of for-profit colleges. It has sued the federal Department of Education for its failures to meet its legal obligation to police this industry and stop the perpetration and collection of fraudulent student loan debt.

 

About HERA

Housing and Economic Rights Advocates (HERA) is a California statewide, not-for-profit legal service and advocacy organization dedicated to helping Californians — particularly those most vulnerable — build a safe, sound financial future, free of discrimination and economic abuses, in all aspects of household financial concerns. It provides free legal services, consumer workshops, training for professionals and community organizing support, creates innovative solutions and engages in policy work locally, statewide and nationally.