The Biden Administration’s DOJ Continues to Shield DeVos in Borrower Defense Proceeding | Press Release

April 19, 2022

Ninth Circuit Court of Appeals to consider whether the case should be reheard after issuing order regarding hearing “en banc”

 

BOSTON – Student borrowers in the lawsuit Sweet v. Cardona (formerly Sweet v. DeVos) on Monday filed a response to a court request asking whether the issue of deposing former Education Secretary Betsy DeVos should be reheard “en banc” in the Ninth Circuit Court of Appeals. If granted, a panel of judges in the Ninth Circuit would reconsider whether Plaintiffs will be allowed to depose former Secretary DeVos about her knowledge surrounding the Department of Education’s long-delayed borrower defense process.

This request comes after a divided panel of the Ninth Circuit granted the Biden administration’s motion to quash the court-ordered subpoena to depose the former Secretary. The government’s motion to block the deposition had previously been denied by Northern District of California Judge William Alsup.

The Department of Justice continues to argue that former ED Secretary Betsy DeVos should not be deposed on the rigged borrower defense policies she instated or the thousands of form denial letters sent under her direction to deny relief to defrauded students. Under these policies first instituted under DeVos, hundreds of thousands of borrowers continue to languish without a decision on their borrower defense applications to this day. Borrowers in this case continue to argue that DeVos possesses unique and essential knowledge surrounding evidence that the Department of Education created a sham borrower defense process designed to deny borrowers debt relief regardless of evidence.

“Student borrowers are owed an explanation for the unlawful delays in processing their borrower defense claims,” said Eileen Connor, Director of the Project on Predatory Student Lending. “The Biden administration and the Department of Justice are shielding DeVos from the courts, siding with DeVos over defrauded student borrowers at every opportunity. Our clients have been waiting years to be able to move on from this nightmare. They deserve answers and they deserve to have their fraudulent loans canceled — yet they are getting neither from this administration right now.”

If deposed, DeVos would be asked to explain the reason for the Department of Education’s documented refusal to process the borrower defense claims of more than 170,000 student borrowers who were cheated by their schools, as well as the thousands of form denial letters that the Department issued in 2020. Notably, this backlog of undecided borrower defense applications has continued to balloon under the Cardona administration.

 

CASE BACKGROUND:

In February 2022, the Biden administration was granted their motion to quash the court-ordered subpoena requiring the former Secretary to submit to a 3-hour deposition via Zoom to account for the Education Department’s illegal actions surrounding borrower defense.

This came after Judge William Alsup had already slammed DeVos’ blanket denials of borrower defense claims and rejected a proposed settlement in the case in an October 2020 ruling, and after student borrowers filed an amended complaint regarding new evidence about the Department’s sham borrower defense process.

Judge Alsup allowed the borrowers to take depositions of other officials from the Department of Education, including:

  • Diane Auer Jones, then-Acting Principal Deputy Under Secretary
  • Colleen Nevin, then-Director of Borrower Defense at Federal Student Aid (FSA)
  • Mark Brown, then-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 were 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.”

The borrowers are represented by the Project on Predatory Student Lending of the Legal Services Center of Harvard Law School and Housing and Economic Rights Advocates (HERA).

For more information about Sweet v. Cardona, 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.

 

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