Judge calls Devos student loan forgiveness process ‘disturbingly Kafkaesque’

U.S. District Judge William Alsup has denied a class settlement meant to address 160,000 student loan forgiveness claims that had gone undecided for over a year, saying Secretary of Education Betsy DeVos had rejected too many claims without justification.

In December 2019, upon being compelled to make decisions about more than 220,000 pending loan forgiveness claims, DeVos issued 16,045 decisions in one day, according to a court file posted by Politico.

DeVos approved only 789 applications, denying 95 percent of the requests. Alsup noted in his ruling that the education secretary had previously approved 62 percent of applications in the first few months of her term.

The judge said that in most of the cases DeVos had not given sufficient explanation for rejecting the application.

“All may not be entitled to relief, but all are entitled to a comprehensible answer,” Alsup wrote in the court order. “For eighteen months, the Secretary refused, largely on the grounds that such answers required backbreaking effort and, thus, substantial time. Now, the Secretary has begun issuing decisions at breakneck speed. But most are a perfunctory ‘Insufficient Evidence’ — without explanation.”

The Department of Education in a statement said it was “studying the ruling.”

“It’s important to understand that no claim is ‘denied,’ ” the department’s press secretary Angela Morabito said. “Many are simply ineligible because the claimant wasn’t enrolled in a eligible program at an eligible date. Others claims don’t demonstrate financial harm. Just because a claim was filed does not make it valid and eligible for taxpayer-funded relief. The Department is following the publicly available process for resolving claims as quickly as possible, so those students who are eligible and were harmed get the relief they deserve.”

Many members of the settlement reported receiving identical denial notes that failed to address why their loans would not be forgiven. DeVos admitted to using only four different denial letters to address the thousands of applications. 

“The Secretary’s perfunctory denial notice does not explain the evidence reviewed or the law applied,” Alsup wrote. “It provides no analysis. And, the borrower’s path forward rings disturbingly Kafkaesque.”

The judge determined the manner in which the applications were processed violated the Administrative Procedure Act that requires her denial notices to not only include a decision, but “a meaningful statement of reasoning that could actually be reviewed for error.”

Updated: 7:24 p.m.