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U.S. Secretary of Education Betsy DeVos faces potential sanctions or a finding that she’s in contempt of court for continuing to collect on the debt of former students at bankrupt Corinthian Colleges Inc., going so far as seizing their tax refunds and wages, Bloomberg News reported. U.S. Magistrate Judge Sallie Kim said that she was “astounded” that the department violated her June order to stop collecting the debts from students, who had been promised refunds of their tuition. “At best it is gross negligence, at worst it’s an intentional flouting of my order,” Kim warned lawyers for the department. Corinthian, once among the largest for-profit college chains in the country, faced a flood of government investigations and lawsuits alleging systemic fraud before filing for bankruptcy protection from creditors in 2015. In the aftermath, the federal government declared that as many as 335,000 former students could erase their loans by checking a box and signing their names on a simple form, under penalty of perjury. Doing so, the former students were told, would void their debt and prompt a refund on past payments. The Education Department “takes responsibility” for the violations of Kim’s order, Charlie Merritt, a lawyer for the agency, told Kim. “We will bring ourselves into full compliance” and make sure the agency “stays that way going forward,” he added.

Consumer borrowing increased at a solid pace in August, helped by the biggest jump in auto and student loans in three years, the Associated Press reported. Total credit rose $17.9 billion after a $23 billion increase in July, the Federal Reserve reported Monday. The August strength came from a $19.8 billion increase in the category that covers auto and student loans. It was the biggest monthly advance since August 2016. The consumer borrowing report showed that the $1.9 billion drop in credit card use in August was that category's weakest performance since a $2.8 billion decline in March. The August changes left total U.S. consumer borrowing at a new high of $4.14 trillion. The Fed's monthly credit report does not cover home mortgages or other loans secured by real estate, such as home equity loans.