The students defrauded by ITT Tech and Corinthian Colleges were not rich. They were often first-generation college students, veterans, and working adults who were targeted by aggressive recruiting tactics. For-profit schools spent heavily on marketing, including veterans recruitment, knowing that veterans' GI Bill benefits could be used to pay tuition regardless of academic quality. Students were told their degrees would lead to good jobs. The schools often had low graduation rates, poor employment outcomes, and in some cases falsified job placement statistics. When the schools collapsed, students were left with federal loans — which are notoriously difficult to discharge in bankruptcy — for degrees that employers didn't recognize.
DeVos delayed the Obama-era borrower defense rule within weeks of taking office. A federal court ordered her to implement it anyway, and she was found in contempt of court for continuing to delay processing claims. She eventually finalized a replacement rule that required students to demonstrate a higher burden of proof to get relief — making it much harder to actually discharge loans. Courts repeatedly found problems with DeVos's approach to borrower defense claims. When Biden took office, he processed tens of billions in borrower defense discharges that had been sitting unaddressed for years.
The irony is documented and specific. Trump University — which was not an accredited university and could not grant degrees — charged students tens of thousands of dollars for real estate seminars based on Trump's claimed expertise. Students alleged they were told the courses would contain proprietary Trump secrets, that they'd have access to Trump personally, and that they would learn from "hand-picked" experts. New York Attorney General Eric Schneiderman sued. Three class actions were consolidated. In November 2016 — just after the election — Trump agreed to pay $25 million to settle the cases while admitting no wrongdoing. The same administration that paid $25 million for running a fake education program then ran the Education Department in ways that protected other fake education programs.
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.
- Trump University settlement — $25 million; November 2016; New York AG; three class actions.
- Borrower defense rule — Obama finalized November 2016; DeVos delayed and replaced; courts found her in contempt for failure to process claims.
- Biden processing — tens of billions in borrower defense discharges; documented by Department of Education press releases 2021-2024.
- ITT Tech / Corinthian — Department of Education actions against both; hundreds of thousands of students affected.