The for-profit college industry had operated for years by targeting veterans, low-income students, and first-generation college students — people who had limited familiarity with higher education and were heavily reliant on federal financial aid. Schools like ITT Technical Institute, Corinthian Colleges, and dozens of others promised job placement rates and career outcomes they couldn't deliver, charged tuition that required massive federal loan borrowing, and then collapsed or faced fraud findings — leaving students with useless credentials and mountains of debt they couldn't discharge in bankruptcy. When these schools were found to have defrauded students, the Obama borrower defense rule provided a path to relief.
DeVos took office in February 2017 — confirmed by a 51-50 Senate vote, the first Cabinet confirmation in history to require the Vice President's tiebreaking vote — and within months began delaying the processing of borrower defense claims. By 2019, approximately 160,000 claims were sitting unprocessed. DeVos then issued a new formula that would approve partial discharges rather than full relief for many students, based on a controversial "earnings comparison" methodology. A federal judge found this methodology invalid and ordered the department to process claims; when the department continued to delay, the judge found DeVos in contempt of court. This was an Education Secretary being held in contempt of federal court for failing to cancel debt for students who had been defrauded. Biden ultimately provided full relief to most claimants through a settlement. The Trump second term reversed many Biden-era protections.
This post distinguishes between documented facts, allegations, and analysis. Where motive, intent, corruption, or illegality remains disputed in the public record, the text attributes that judgment to court findings, official records, direct quotes, or the reporting linked below.
The contempt ruling against DeVos was not a minor procedural development. A sitting Cabinet secretary was held in contempt of federal court for failing to comply with an order requiring her department to cancel debt owed by fraud victims — people who had been systematically lied to by schools that took billions in federal student loan dollars before collapsing. These were not abstract plaintiffs. They were people who had borrowed $15,000 to $60,000 for degrees from schools that had promised job placement rates of 80% or 90%, delivered 20%, and then shut down — leaving students with worthless credentials, no refund, and loan debt they could not discharge in bankruptcy.
The total student loan debt outstanding is approximately $1.7 trillion, held by 45 million Americans. The policy architecture around it — who qualifies for relief, under what conditions, administered by which processes — directly affects those 45 million people's financial lives. The first Trump term demonstrated what those choices look like when the Secretary of Education is a school choice advocate with no prior public education experience and financial ties to the student loan servicing industry. The second term has extended the pattern: the SAVE repayment plan blocked, borrower defense processing slowed again, Public Service Loan Forgiveness eligibility narrowed. The people most affected are teachers, nurses, social workers, and public servants who took on debt expecting the forgiveness program to function as promised.
- Contempt order — US District Court Northern District of California; Judge William Alsup held DeVos's department in contempt May 2020 for failing to process claims per court order.
- 160,000 claims — Department of Education's own reporting to Congressional oversight; claims backlog documented.
- DeVos Senate vote — 51-50, February 7, 2017; VP Pence cast the deciding vote; first Cabinet confirmation ever to require VP tiebreaker.
- Earnings comparison formula — struck down by multiple courts as arbitrary.