October, 2019
Washington – A federal judge has made waves by threatening to put Education Secretary Betsy DeVos in jail for contempt of court. Under DeVos, and in contradiction to Judge Sallie Kim's order, the Department of Education has continued to collect on thousands of student loans that should have been cancelled because the loans were made fraudulently by a for-profit school, Corinthian College.
Judge Kim may not actually jail DeVos, but she has raised the possibility.
The waves were not high enough, however, to draw the attention of the higher education trade press, namely The Chronicle of Higher Education or Inside Higher Ed, neither of which took note. It is not higher education news, quite apparently, when borrowers are stiffed in the thousands and the Secretary ignores the courts. It has become routine. Perhaps it will be news to the trade press if and when the law and judges' orders are followed.*
Later this month we'll learn what Judge Kim will do in the face of the Secretary's contempt. I hope it is not a fine that the Department will pay with taxpayer dollars. That would be adding insult to injury. A fine to be paid personally by the Secretary would be almost as bad, as she is a billionaire. More fitting would be a hefty personal fine that would be paid to the non-profit organizations that have had to bring suits on behalf of borrowers whose protections have been violated in a variety of Department programs, to include TEACH and PSLF. Or a few days in jail.
To some, it is not particularly newsworthy when a federal agency like the Department of Education is captured and controlled by the interests it is supposed to be regulating. There is a vast amount of political science literature on the subject. In this case, there is even a smoking gun: the for-profit college association publicly asked the Secretary to ignore the law on "borrower defense," and she did. But she is not the first cabinet official to take her orders from those she is regulating.
Arguably, the whole higher education community has now become inured to the corruption that feeds off the victimization of student loan borrowers. It is almost as if there is a law of nature that determines how industries and organizations exploit the vulnerable. In biology, such a natural relationship is observed between ants and aphids. Aphids supply the sweet nourishment for ants that herd them. If the aphids grow wings and try to take off, like borrowers trying properly under the law to escape their loans, the ants strip them of their wings and keep them captive. It's hard to think of a better analogy to describe the DeVos Department and how it strips borrowers of their rights. Borrowers who were legally entitled to loan discharge were slapped instead with new collection actions, like wage garnishment and tax refund seizures.
For public consumption, the Department has recently started to put blame on its servicers and loan collection contractors for violations of laws and regulations. This would resonate truthfully were it not for the existence of a robust revolving door network between the Department and the servicers. If the Department is serious about servicer shortcomings, it would disqualify offending servicers from competing for more business, including the upcoming NextGen awards. Unless that happens, it looks like business as usual.
Why not some jail time for contempt of court? Nothing else has worked.
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* During the week following Judge Kim's condemnation of Secretary Devos, Inside Higher Ed covered stories such as a student who sold pot out of a dorm room, a professor who used grant money at a strip club, and a study by a conservative organization (AEI) that suggested borrower complaints are misguided, the real problem being over-complicated legislation. But about contempt of court for ruining the lives of thousands of borrowers? Nichts. Nada.
