Education Department temporarily blocked from seeking $23M recoupment from DeVry

Higher Ed Dive

Natalie Schwartz

November 3, 2023

Dive Brief: 

• An administrative law judge has temporarily blocked the U.S. Department of Education from recouping over $23 million in discharged student loans from DeVry University, a for-profit college.

• Robert Layton, administrative law judge at the Education Department’s Office of Hearings and Appeals, granted DeVry’s request last month to pause the recoupment.

• The Education Department has tried to regain the money under the borrower defense to repayment regulation, which authorizes loan cancellation for students defrauded by their colleges. Layton’s order cited a separate legal challenge against the department’s newest version of these regulations that temporarily blocked them from taking effect.

Dive Insight: 

On Sunday, an Education Department spokesperson said the agency has requested reconsideration of the decision temporarily blocking the recoupment.

“However, the pause of the recoupment proceeding does not impact other potential recoupment actions,” the spokesperson said.

The recoupment stems from the Education Department’s 2022 decision to clear up to $71.7 million of student loans for people who made borrower defense claims against DeVry.

The move was a turning point for the department — it marked the first time the agency had granted this type of relief to students who attended an institution that is still open and accessing Title IV federal financial aid.

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