U.S. Secretary of Education Betsy DeVos faces potential contempt of court and sanctions for continuing to collect on the debt of former students at bankrupt Corinthian Colleges Inc., going so far as seizing their wages and tax refunds, Bloomberg News reported. U.S. Magistrate Judge Sallie Kim was “astounded” that Betsy and her department violated their order to cease collections of debts from the students, who were promised refund of their tuition.
In 2015, Corinthian had to file for bankruptcy protection from creditors after facing a barrage of government investigations and lawsuits alleging systemic fraud. As a result, the federal government declared that the 335,000 former students could erase their loans by filing out a simple form, under penalty of perjury, would void their debt and prompt a refund on past payments.
Charlie Merritt, a lawyer for the Education Department says the agency “takes responsibility” for the violations of Kim’s order. “We will bring ourselves into full compliance” and make sure the agency “stays that way going forward,” he added.
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