Bankruptcy Law, student loan debt

Betsy DeVos Faces Possible Jail Time for Failing to Forgive Student Loan Debt

Department of Education Secretary, Betsy DeVos, has been under fire for her failure to forgive student loans for more than 150,000 student loan borrowers. These borrowers have filed a lawsuit against both DeVos and the Department of Education, alleging they are being deprived of student loan forgiveness they have earned through the borrower defense.

DeVos has been accused of continuing to pressure former students of one of these institutions, Corinthian Colleges, Inc., to continue to pay their student loan debts. These same students say they were promised that their student loan debts would be forgiven under the borrower defense.

The borrower defense was implemented during the Obama administration, and it served as a method to allow students have their federal student loan obligations cancelled if their school either misled them or engaged in misconduct. Many of these institutions were private ones that have been otherwise empowered under DeVos.

The Education Secretary is accused of not following a June 2018 court order made by U.S. Magistrate Judge Sallie Kim that prevented her from going after former students of Corinthian Colleges. Most judges do not take too kindly to parties willfully violating their orders, and Judge Kim is no different. At a hearing in San Francisco last week, the judge expressed her frustration for the violation. More than 16,000 students had been informed even after this ruling that they had payments due on these federal student loans, which were supposed to have been forgiven.

While the judge did not necessarily say that DeVos would be going to jail, she emphasized the fact that this is a violation of her order, and, as a result, she had the right to put her in jail.

Corinthian College was one of the largest for-profit college chains that faced allegations of fraud in 2015. Since that time, the Education Department has forgiven a whopping 10 student loans but has continued to pursue other former students for their loans. According to a statement from the Project on Predatory Student Lending, 16,034 affected students have received demands for loan payments when they should not have, and 3,289 have made at least one or more payments which they did not owe. On top of this, the Department of Education also executed involuntary wage garnishments and took tax refunds from 1,808 students when they had no right to do so.

It has not been reported just how Judge Kim intends to handle this issue, but she did state that her order has been violated at least 16,000 times by DeVos and her Department and that she intends to see that DeVos will pay the consequences for these violations.

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For borrowers who are struggling with student loan debt, relief options are available.  Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. There are ways to file for bankruptcy with student loan debt.  It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at

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