EDUCATION SECRETARY FOUND IN CONTEMPT WASHINGTON —

A federal judge Thursday fined Education Secretary Betsy DeVos for contempt of court, ruling that she had violated an order to stop collecting on loans owed by students from a now-defunct for-profit chain of colleges.

What happened

Magistrate Judge Sallie Kim of the U.S. District Court in San Francisco ordered the Education Department to pay a $100,000 fine. The money will go toward various remedies for students who are owed debt relief after President Barack Obama’s Education Department found they were defrauded by the chain, Corinthian Colleges, which collapsed in 2014.

The ruling is a victory for the more than 60,000 students who have been on a financial roller coaster since Corinthian imploded, after state and federal officials found that it lured students through deceptive recruitment practices and falsified job placement rates.

Why it matters

The decision stems from a class-action lawsuit filed in 2017 by the Project on Predatory Student Lending of the Legal Services Center of Harvard Law School and the group Housing and Economic Rights Advocates, both of which represent former Corinthian students. For more than a year, the students’ lawyers argued that DeVos had illegally punished thousands of cheated students who were owed relief from the federal government.

Toby Merrill, director of the project, said that the ruling demonstrated “the extreme harm” of DeVos’ actions. “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,” she said.

In a video statement posted on Twitter, Mark Brown, chief operating officer of the Education Department’s Federal Student Aid office, said that loan servicers had “mistakenly” billed about 16,000 students and parents.

“Although these actions were not done with ill intent, students and parents were affected and we take full responsibility for that,” Brown said.

What’s next

Brown said the department had taken swift action to respond, including refunding nearly all payments that borrowers should not have had to make, returning tax refunds and wages that were seized, and updating credit reports for affected students and parents. He said the department had also formally reprimanded loan servicers that collected debts, and initiated personnel action against Education Department employees who failed in their oversight roles.

Betsy DeVos, U.S. secretary of education, was found by a federal judge to be in contempt of court for her role in collecting on certain student loans.