Betsy DeVos overruled plan to help students defrauded by for-profit colleges


Career officials had recommended forgiving student loans for 200,000 defrauded borrowers.

Career professionals in the Education Department supported forgiving student loans from those defrauded by for-profit universities, but they were overruled by Education Secretary Betsy Devos, according to a trove of documents obtained by NPR this week.

The internal memos, released Wednesday, show career staff during the end of President Obama's second term firmly in support of forging student loans of more than 200,000 borrowers who attended now-shuttered for-profit colleges such as Corinthian Colleges and ITT Technical Institute.

Weeks before DeVos became head of the agency, nonpolitical staff "recommended to the department's political leadership that these borrowers deserve no less than full relief from their student debts," according to NPR's review of the documents. The memos contained detailed accounts of how the borrowers were defrauded by the colleges, how credits obtained by students were essentially worthless, and why provisions in the law supported full debt forgiveness.

The memos are in direct contradiction to statements DeVos made to Congress.

NPR reported that, in early November, DeVos wrote to House Education Committee Chair Bobby Scott (D-VA) that "the clear intent of the prior Administration was to eventually provide blanket relief without review of the facts and evidence."

After NPR broke the story, Scott said in an emailed statement that his office never received the documents obtained by NPR "despite multiple requests for relevant documents over the past year."

He added that the memos "make clear that the Department's own internal analysis found that student borrowers from Corinthian Colleges and ITT Technical Institute were victims of egregious fraud and are entitled to full relief."

Further, the "lack of transparency and its refusal to provide defrauded borrowers full and immediate relief are issues that warrant discussion at tomorrow’s hearing."

DeVos is scheduled to testify before the Education Committee Thursday morning about the issue of student loan forgiveness. Under her leadership, the department came up with a formula that would partially forgive some student loans on a case-by-case basis, NPR reported.

DeVos has often run into trouble on the issue of student loans.

In October, a federal court fined her $100,000 and held her in contempt of court for defying an order to stop collecting student loan payments from borrowers defrauded by Corinthian College. Despite a court order to stop, the Education Department continued to collect student loan debt from at least 16,000 borrowers.

Earlier this month, Student Debt Crisis, a student loan reform organization, filed a lawsuit against the Consumer Financial Protection Bureau and the Education Department alleging the agencies failed to properly monitor and police student loans.

DeVos began her time in public service defending the use of guns in schools by claiming a false need for firearms to fend off bear attacks, and stirred controversy earlier this year when she adamantly defended proposed cuts in federal spending to the Special Olympics.

Published with permission of The American Independent Foundation.