Judge Condemns DeVos’ Widespread Denial of Student Loan Facilitation Applications as “unsettlingly Kafkaian”

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Alsup said he was alarmed that DeVos had responded in recent months by quickly rejecting tens of thousands of applications through “superficial” denial notices. Of the motions in question in the class action, DeVos rejected 74,000 motions and granted 4,400 motions, which corresponds to a rejection rate of 94 percent, as the judge found.

Grounds for the judgment: Alsup described the rejection notices as “potentially unlawful” and said he was considering preventing DeVos from issuing further rejection notices in the course of the proceedings.

The judge appointed by President Bill Clinton for the Northern District of California also took the unusual step of approving the testimony of up to five Education Department officials in order to support the Trump administration’s decision to deny the lawsuits and its months of delays to be checked during processing. He wrote that DeVos did not have to sit in person to testify “at this point,” but said that it could be done in the future.

In many cases, the department used form letters in its most recent series of denials stating that student loan borrowers had provided insufficient evidence without further explanation.

As a result, borrowers are facing a process that “sounds disturbingly Kafkaish,” wrote Alsup, describing the system as oppressive. The Department of Education said borrowers could appeal the denials by explaining why they believed the department misjudged their claim, but it never provided a meaningful explanation of how those conclusions came about, he said.

Key context: The now abandoned settlement, which was concluded in April and which brought Alsup’s preliminary approval in May, would have required DeVos to process around 160,000 applications and make final decisions within 18 months. At the time, both the Department of Education and student lawyers said they thought this was a sensible approach.

But in recent months, the Education Department’s rash rejections have led many students to protest against the deal. A court hearing, held practically earlier this month, was attended by 650 attendees, including hundreds of college students, many of whom shared their concerns about the settlement in the face of DeVos denials.

“Students came together to speak for themselves and show the court the immense scope of the trauma they have suffered from the Department of Education, and the courts are listening,” said Eileen Connor, legal director for the Harvard Law School Predatory Student Project Lending, which represents the students in the class action along with the Housing & Economic Rights Advocates group. “We look forward to the next stage of the legal battle, where we will remove officials from the Department of Education to explain their actions under oath.”

DeVos record: A spokesman for the Ministry of Education did not initially comment on the decision.

DeVos’ handling of the “Borrower Defense Until Repayment” program has repeatedly been reprimanded by federal judges and has been one of their most politically controversial university policies over the past four years.

The secretary argues that the Obama administration’s approach to combating student loan fraud has been too lenient and expensive for taxpayers. She has tried to limit lending to students who have been betrayed – an attempt that has infuriated her Democratic critics.

When DeVos took office, she moved to delay implementing the Obama-era standards for lending. But it was foiled by a judge who ruled that it had illegally postponed the rules.

DeVos rewritten the standards and tightened the rules in 2019. But more than a dozen Republicans in Congress have partnered with Democrats to block their policies on fear that it is too difficult for deceived students to get help. President Donald Trump sided with his education minister and vetoed the law that paved the way for the DeVos rule to come into effect in July.

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