DeVos system gave 12 minutes to decide student loan cases
Stacy Cowley
Former Education Secretary Betsy DeVos made no secret of her disdain for a program intended to forgive the federal student loans of borrowers who were ripped off by schools that defrauded their students. She called it a “free money” giveaway, let hundreds of thousands of claims languish for years and slashed the amount of relief granted to some successful applicants to $0.
Then, after a class-action lawsuit made it impossible to stall any longer, her agency built what amounted to an assembly line of rejection.
In DeVos’ final year in office, her agency denied nearly 130,000 claims — far surpassing the 9,000 rejections in the prior five years — with a system that pressured workers to speed through applications in a matter of minutes, according to internal Education Department documents filed in court.
The department aimed to process 5,000 applications a week, the documents show — a standard that required agency employees to adjudicate claims that could stretch to hundreds of pages in less than 12 minutes. Those who did it faster were eligible for bonuses; those who took longer risked being fired. Agency employees rejected claims against hundreds of schools for not including written evidence that borrowers were never required to submit. And the department frequently disregarded its own findings of wrongdoing by schools when reviewing claims.
“The majority of applications will be denied,” Colleen Nevin, a career department official who led the unit that handled claims, wrote in a 2019 memo. Her group had evaluated cases involving 1,400 schools, she wrote, and approved claims involving only three. All the approvals were based on criteria established before DeVos took office.
The documents were obtained under court order by lawyers in the class-action case, which involves more than 200,000 people who brought claims under a relief program known as borrower defense to repayment. The program permits borrowers who were substantially misled by their schools to have their federal student loans forgiven. Once little used, the system was flooded with claims during the Obama administration after a government crackdown toppled a series of large for-profit chains.
Most of those claims were still lingering when President Donald Trump took office, and the lawsuit, filed in 2019 in federal court in San Francisco, sought to compel the department to review claims that had languished. In a settlement struck last year, the department agreed to speed things up and make decisions.
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