• A judge has ruled that Betsy DeVos must testify in a case brought by 160,000 defrauded students.
  • Students claim DeVos mismanaged a student loan forgiveness program defrauded by for-profit schools.
  • Under Obama, the program had a 99.2% approval rating, but under DeVos, 99.4% of applicants were turned down.
  • See more stories on the Insider business page.

As Education Secretary under President Donald Trump, Betsy DeVos was tasked with overseeing the loan forgiveness program for students defrauded by for-profit schools. But thousands of those students say they didn’t get the relief they deserved and sued DeVos for his mismanagement of the program.

A judge has just ruled that DeVos must testify in court on this matter.

The Biden administration didn’t want this to happen. In February, he joined DeVos to fight a subpoena in the lawsuit filed by approximately 160,000 defrauded students, claiming it was a “extraordinary request. “But on Wednesday Judge William Alsup wrote in a 12-page decision that his testimony was warranted given the “sparse” documentation of DeVos ‘reasoning for dismissing the borrowers’ claims.

“Even assuming Secretary DeVos retains some measure of executive prerogative, she must respond to a subpoena appropriately,” Alsup wrote in the decision. “The judicial process goes even to reluctant executives.”

Over the past decade, several for-profit schools have closed their doors following investigations claiming schools were engaging in fraudulent behavior related to federal loans. The Corinthian Colleges and ITT Technical Institutes were two of the largest schools accused of violate federal law by persuading their students to take out loans they could not repay. They both shut down, as did other for-profit companies, such as Education Corporation of America.

DeVos, heir to AmWay’s fortune and a member of one of America’s richest families, by Forbes, oversaw the “borrower’s defense against reimbursement” program to write off the debt of eligible defrauded borrowers, but the program was overwhelmingly unsuccessful. Compared to a 99.2% approval rate for claims filed under President Barack Obama, DeVos had a 99.4% denial rate for borrowers and built up a huge backlog of claims from eligible defrauded borrowers seeking to cancel student debt.

As part of DeVos, the program began to compare the median earnings of graduates with requests for debt relief to the median earnings of graduates from comparable programs, and the larger the difference, the more assistance the applicant would receive. .

The high refusal rate alarmed legislators, advocates and borrowers who wanted student debt relief but didn’t get it, and as Alsup said in its ruling, DeVos failed to provide a sufficient explanation as to why so few requests have been processed.

In March, Biden’s Education Secretary Miguel Cardona canceled $ 1 billion in student debt for about 72,000 defrauded borrowers and said in a statement that DeVos’ methodology for providing debt relief to defrauded students had been ineffective and had to be canceled.

“Borrowers deserve a streamlined and fair path to relief when they have been harmed by the fault of their institution,” Cardona said in a declaration. “Careful examination of these claims and the associated evidence has shown that these borrowers have been wronged and we will give them a fresh start with their debt.”

Critics of DeVos’ appointment had argued that her financial ties were a conflict of interest, as she had never sold it. multi-million dollar stake in Neurocore, a “brain training” program for children. She is also a long-time advocate of ‘choice of school’, or vouchers that allow parents to send their children to private rather than public schools.

DeVos separately asked the Georgia-based 11th Circuit Court of Appeals to block the subpoena. Alsup has scheduled a hearing for June 3.