Biden’s DOJ supports Trump’s education secretary on deposition

Attorneys for defrauded for-profit college students challenging delays and blanket denials of loan forgiveness claims are pushing to depose former Education Secretary Betsy DeVos in a case where President Joe Biden's administration is backing her attempts to avoid having to testify.

DeVos has "unique, firsthand knowledge of issues at the heart of the underlying litigation," the plaintiffs' attorneys wrote in court filings on Monday.

Democratic lawmakers have condemned DeVos' handling of the borrower defense rule, which allows federal loans to students defrauded by predatory for-profit colleges to be forgiven. Biden has pledged to restore original President Barack Obama administration rules and quickly review all claims, including those denied during President Donald Trump's administration under which just 4% of applications were approved.

But Biden's Department of Justice is supporting DeVos' defense in the lawsuit. It sided with DeVos' personal attorney, Jesse Panuccio of Boies Schiller Flexner LLP, in opposing the former Cabinet member's deposition after U.S. District Judge William Alsup in San Francisco allowed her to be served with a subpoena.

"Plaintiffs' demand for a former Cabinet official's deposition is extraordinary, unnecessary, and unsupported," wrote DOJ attorney Kevin P. Hancock. "It is a transparent attempt at harassment -- part of a PR campaign that has been central to plaintiffs' litigation strategy from the outset.

Attorneys for the defrauded students seek information concerning the individuals and process involved in drafting the form denial letters and an order from the Education Department to Federal Student Aid for it to halt decisions on the applications. They have already deposed Principal Deputy Under Secretary Diane Jones, Federal Student Aid Director of Borrower Defense Colleen Nevin, the aid agency's Chief Operating Officer Mark Brown and former Acting Chief Operating Officer James Manning.

"For-profit college students have been waiting years for justice in this case, and we will continue working on their behalf through the courts to get the answers and justice they deserve," said Toby Merrill, director of the Project on Predatory Student Lending, which represents the class of roughly 160,000 former for-profit college students seeking debt relief.

The DOJ and Panuccio did not respond to requests for comment. Sweet v. DeVos, 19-cv-03674 (N.D. Cal., filed June 25, 2019); In re Elisabeth DeVos, 21-mc-14073 (S.D. Fl., filed Feb. 8, 2021).

In a filing opposing the defense's motion to quash the subpoena, plaintiffs' attorney Margaret E. O'Grady of the Legal Services Center of Harvard Law School emphasized that DeVos is the only individual with personal knowledge regarding the agency delaying the processing of borrower defense claims and uniformly denying applications.

While the Education Department has denied the existence of such a blanket policy, O'Grady said discovery revealed the opposite and that deposed officials pointed to DeVos as "the only person with authority to make the decision to stop -- and start -- deciding borrower defense applications on the merit."

When questioned about the validity of the Education Department's position that an injunction in an unrelated lawsuit prohibited the processing of loan forgiveness claims, Jones answered, "I am not a senior enough official to have decision-making authority" on "whether a particular decision was related to that litigation or not."

"I was told that was the decision," she continued.

During Nevin's deposition, she was asked if it was possible to issue decisions on approvals during the class period between May 2018 and November 2019.

"I think it was a policy decision," she replied.

O'Grady also pushed back on DeVos' defense that she's protected by a doctrine limiting requests for testimony from high-ranking government officials. She noted that DeVos is no longer the education secretary and that numerous former government officials, including the former heads of the Consumer Financial Protection Bureau, U.S. Information Agency and Department of Housing and Urban Development, have been deposed.

Alsup ruled in January that a "prior order restricted deposition of the secretary" but that it "imposed no such restriction regarding citizen DeVos."

A deal was reached last year to settle the class action, but it fell apart in October after the Education Department started to issue blanket denials with little explanation for its findings. Alsup rejected the settlement, finding that "the secretary's new perfunctory denial notices undermine the proposed settlement, contradict her original justification for delay" and are "disturbingly Kafkaesque."

The judge expedited discovery, allowing the depositions of four agency officials.

DeVos was also hit with a $100,000 contempt fine in a separate case from former Corinthian College students seeking debt relief because they were allegedly required to repay federal loans in violation of a court order.