A judge held Secretary of Education Betsy DeVos in civil contempt this week for defying a court order that banned her agency from collecting loan payments from students who were defrauded by a now-folded college. The U.S. Education Department was also ordered to pay $100,000 in damages.
There is "no question that Defendants' violations harmed individual borrowers who were forced to repay loans either through voluntary actions or involuntary methods," Magistrate Judge Sallie Kim of the Federal District Court in San Francisco said in her ruling.
The order stems from a 2017 lawsuit filed against DeVos, who upon taking office altered a debt forgiveness program that was instituted under the Obama administration for students who attended the for-profit Corinthian Colleges, which were deemed fraudulent and collapsed in 2014. The Project on Predatory Student Lending filed a class-action lawsuit on behalf of thousands of students demanding that the Education Department forgive the loans as promised.
In May 2018, Kim ordered the Education Department to stop all loan collection efforts for affected students. Last month, however, it was revealed that the agency had sent payment notices to over 16,000 borrowers and received 3,298 payments. The department also collected payments from 1,808 Corinthian borrowers through wage garnishments and the seizure of tax refunds.
"Secretary DeVos has repeatedly and brazenly violated the law to collect for-profit college students' debts and deny their rights, and today she has been held accountable," Toby Merrill, Project on Predatory Student Lending's director, said in a statement Thursday.
The Department of Education responded to the ruling on Twitter, saying it was "disappointed" by the court's order but ceded that the agency made "unacceptable mistakes."
"Although these actions were not done with ill-intent, students and parents were affected and we take full responsibility for that," said Mark Brown, the department's chief operating officer of Federal Student Aid. Brown added that the department is working to refund all of the payments collected and institute structural changes within its collections processes. "We know we must do better," he said.
<i>Attorney General Kamala Harris displaying an internal document showing the target demographic of Corinthian Colleges during a news conference in 2013. Photo Credit: Eric Risberg/AP/Shutterstock</i>
Corinthian Colleges, which enrolled 85,000 students at two California campuses, first came under scrutiny in 2012 for false advertising, deceptive marketing that targeted vulnerable communities, and falsifying job placement rates. Under then-California Attorney General Kamala Harris, the state sued Corinthian in 2013. The Education Department later instituted an expedited loan forgiveness process.
"Where students have been harmed by fraudulent practices, I am fully committed to making sure students receive every penny of relief they are entitled to under law," then-Secretary of Education Arne Duncan said in a statement in 2015.
In 2017, however, the department under Secretary DeVos began denying loan forgiveness applications. Then in March 2018, the agency started notifying students that forgiveness plans would be tied to individual incomes and began demanding and collecting payments.
Within months, the San Francisco court ordered the agency to cease its collection efforts. Judge Kim on Thursday determined that the Education Department took only "minimal efforts" to comply with the court's injunction.
"The judge is sending a loud and clear message: students have rights under the law and DeVos' illegal and reckless violation of their rights will not be tolerated," Merrill added in his statement.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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