Betsy DeVos Blocks Debt Relief for 200,000 Defrauded For-Profit College Students Despite Career Staff Recommendations

Education Secretary Betsy DeVos systematically blocked debt relief for over 200,000 students defrauded by for-profit colleges, overruling internal Education Department career staff who had recommended full loan forgiveness. Internal memos from the department’s Borrower Defense Unit dated January 9-10, 2017 (just before Trump’s inauguration) explicitly recommended full relief for students defrauded by Corinthian Colleges and ITT Technical Institute, finding these schools made “false and misleading” representations about job placement and employment guarantees. The Obama administration had approved nearly 28,000 borrower defense claims in the six months before January 20, 2017. Under DeVos, the department halted all processing and approved zero applications for debt relief despite over 65,000 pending claims. DeVos delayed implementation of borrower defense regulations scheduled for July 1, 2017, and disagreed with full debt relief, arguing students “still got value” from fraudulent schools and deserved only partial relief. Four Democratic state attorneys general filed lawsuits in December 2017 to compel DeVos to grant relief. DeVos’s obstruction protected the for-profit college industry, which had spent over $40 million lobbying from 2007-2012 and made substantial political donations. Her actions demonstrated systematic regulatory capture, where agency leadership protects industry interests over defrauded consumers. The Biden administration would later cancel $5.8 billion for Corinthian students and $3.9 billion for ITT Tech students, but DeVos’s multi-year delay left hundreds of thousands of borrowers in financial devastation while protecting predatory institutions.