A federal judge ruled that Education Minister Betsy DeVos and the Department of Education had contempt of court for violating a federal judge's student loan order.
The judge had already ordered the Department of Education to suspend the collection of loans taken from student borrowers in order to attend to a profit that no longer exists. But more than 16,000 borrowers wrongly said they owed payment after the court order and many of them received those payments from their paychecks, according to court documents.
U.S. Magistrate Judge Sally Kim ordered the Department of Education to pay $ 100,000 in funds to affected borrowers who visit Corinthian Colleges, Inc.
"There is no dispute here that the defendants violated the preliminary injunction," the judge wrote. "There is no doubt that the defendants' misconduct has harmed individual borrowers who were forced to pay off loans or through voluntary actions or coercive methods (tax offsetting and payroll) and who suffered from poor credit reporting. The defendants did not provide evidence that they failed to comply with the preliminary injunction and the evidence showed only minimal effort to comply with the preliminary injunction. defendants in civil contempt. "
Mark Brown, Chief Operating Officer of Federal Student Aid at the Department of Education, says in a video posted on Twitter that the Department of Education is doing everything it can to resolve the situation .
"Unfortunately, servicing loans erroneously charge approximately 16,000 students and parents," Brown said. "Although these actions were not done with deliberate intent, students and parents were affected and we take full responsibility for this. We took swift action to correct the mistake."
This news comes after a senior official in the federal student loan program resigned Thursday called the system "fundamentally broken" and "insane." Wayne Johnson, who reported directly to DeVos, also wants billions in existing debt.
Johnson believes that Washington should follow its leadership and leave the federal student loan program.
"Washington has to be 100% of the student loan business," he told CBS News, adding that not only was the system broken, it was a "crazy system."
Johnson watched student debt continue to balloons with the cost of college. Overall, 42 million Americans currently have student debt. The average household owes almost $ 47,000.