x

Denver's Leading Local News: Weather, Traffic, Sports and more | Denver, Colorado | 9NEWS.com

Betsy DeVos held in contempt for violating student loan order

The Education Department was ordered to stop collecting on loans owed by students of a now-defunct college, but payments were still collected.
Credit: AP
FILE - In this April 10, 2019 file photo, Education Secretary Betsy DeVos testifies before the House Education and Labor Committee at a hearing on 'Examining the Policies and Priorities of the U.S. Department of Education' on Capitol Hill in Washington.(AP)

A federal judge on Thursday held Secretary of Education Betsy DeVos in contempt of court for violating an order to stop collecting loans owed by thousands of students of a for-profit college that has gone out of business, according to multiple reports.

The judge had reportedly ordered the Department of Education to stop collecting on loans from students who attended the now-defunct Corinthian Colleges. Despite that order, the department admitted that it still collected on loans from more than 16,000 borrowers, according to Politico. About 1,800 had their wages garnished, according to CNN, while more than 800 had their credit reports negatively affected.

“There is no question that the defendants violated the preliminary injunction. There is also no question that defendants’ violations harmed individual borrowers,” Kim wrote in her ruling, via The Washington Post. “Defendants have not provided evidence that they were unable to comply with the preliminary injunction, and the evidence shows only minimal efforts to comply.”

RELATED: DeVos issues new loan forgiveness rule for swindled students

RELATED: DeVos: Efforts to boycott Israel are a 'pernicious threat'

The department has also reportedly been ordered to pay a $100,000 fine for violating the previous ruling. The money will go toward compensating the 16,000 borrowers affected.

"We're disappointed in the court's ruling. We acknowledged that servicers made unacceptable mistakes," the Department of Education said on Twitter Thursday. In an accompanying video, Federal Student Aid COO Mark Brown said his agency was taking full responsibility and was working to make amends.

"Ninety-nine percent of customers who made payments on their federal student loans when they didn't need to have been refunded and we expect the final few to be refunded by the end of this week," Brown said, adding that it was also refunding those who had their wages garnished or tax refunds withheld.