The Education Department is moving to discipline employees and reprimand its loan servicers over the erroneous collection of tens of thousands of student loans that violated a federal judge’s order, after the department and Secretary Betsy DeVos landed in possible contempt of court, POLITICO has learned.
— Federal Student Aid chief Mark Brown last week sent “letters of concern” to the companies hired to collect federal student loans, admonishing them for not following directives to stop collecting the loans of borrowers who attended Corinthian Colleges and were supposed to be shielded by the judge’s May 2018 order.
— The department has also taken steps to discipline at least several of its own employees, according to people familiar with the matter who spoke on background. Angela Morabito, a department spokesperson, said the agency would not comment on employee disciplinary issues.
— The fallout comes after U.S. Magistrate Judge Sallie Kim last week said she was considering whether to hold the department and DeVos in contempt or impose sanctions, including fines, for violating her order. Kim said she was “extremely disturbed” and “really astounded” by the department’s handling of the situation.