October 19, 2022 News & Press Releases

ICYMI: Yesli Vega Decries“Reckless” Spending, But Hides that She Filed for Bankruptcy & Demanded Taxpayers Bail Her Out

by Democratic Party of Virginia

Prince William Times: “Vega and Her Campaign Staff Did Not Respond to Three Emails Sent Over a Five-Week Period Seeking Comment and Context about Her Bankruptcy Filing”

Richmond, VA  In the past, far-right extremist Yesli Vega has said that efforts to forgive certain amounts of student loan debt is “unfair to the millions of us that paid off our debt.” But according to new reporting from the Prince William Times, she never paid off her debts. 

Vega has claimed to be a fiscal conservative, pledging to end “reckless” government spending. Despite her public comments on the campaign trail to earn votes, her past shows an entirely different story. 

Prince William Times: Before Vega decried ‘reckless’ spending, she had $96K in student loans, debts cleared in personal bankruptcy

By Cher Muzyk and Jill Palermo

October 17th, 2022

Supervisor Yesli Vega, the Republican nominee for U.S. Congress in Virginia’s 7th District, has been critical of President Joe Biden’s student loan forgiveness plan and decries “reckless” government spending in a recent TV ad. Yet Vega and her husband filed for personal bankruptcy in 2009 and had more than $96,000 in debts discharged in the proceeding, including more than $46,000 in student loans, according to court records.

Vega, 37, and her husband, Rene Vega, were living in Fort Washington, Maryland, when they filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the District of Maryland, which has not been previously disclosed

Yesli Vega was in her early 20s, and the couple’s two children were 1 year old and 3 months old at the time, according to the couple’s bankruptcy petition. A year earlier, in 2008, Rene Vega lost two Dale City homes to foreclosure, according to Prince William County records. 

Property addresses on the bankruptcy petition match addresses for the Vegas listed on Prince William County property records and publicly available directories. 

Vega, R-Coles, has been outspoken about her opposition to the Biden administration’s student loan forgiveness plan. Under the plan, most people with federal student debt will be eligible to apply for up to $10,000 of loan forgiveness and as much as $20,000 if they received a Pell Grant, which is available to low-income undergraduate students.

Soon after the plan was rolled out, Vega tweeted, “Biden’s plan to ‘forgive’ student loans for a select few, is nothing but an election year campaign trick funded by you, the taxpayers. It’s unfair to the millions of us that paid off our debt or skipped college to get an early jump into the workforce.”

She followed that tweet with another mentioning her opponent: “Hardworking Virginians shouldn’t have to foot the bill for someone else’s college degree, so that Abigail can try to buy your vote.”

Vega and her campaign staff did not respond to three emails sent over a five-week period seeking comment and context about her bankruptcy filing. The Prince William Times asked Vega to comment on the reasons that led to her bankruptcy and to explain her view on defaulted loans discharged through bankruptcy proceedings versus Biden’s student loan forgiveness plan. 

Vega was elected to the Prince William Board of County Supervisors in 2019. She announced her candidacy for U.S. Congress in late December 2021, shortly after the 7th District’s boundaries were redrawn and released by the Supreme Court of Virginia.

The 7th District seat is currently held by Rep. Abigail Spanberger, a Democrat, who is seeking a third term in the Nov. 8 election. 

The hotly contested race is important to the GOP’s effort to take control of the U.S. House of Representatives. The seat is currently rated “lean Democrat” by the Cook Political Report. But in last year’s gubernatorial race, voters in the newly drawn district favored Republican Gov. Glenn Youngkin by nearly 5 points. Youngkin garnered 52% of the vote to Terry McAuliffe’s 47.1%, according to an analysis by the Virginia Public Access Project.  

Bankruptcy filing shows student loans, medical bills, tax debts

In Vega’s 30-second ad regarding government spending, she credits her father, Abel Ventura, an immigrant from El Salvador, with teaching her how to budget her money. Ventura advises in Spanish, “Save more than you spend.” Vega goes on to accuse Biden, Rep. Nancy Pelosi and Spanberger, of “driving up inflation” and “hurting Virginia families” as a result of their “reckless spending.”

On Facebook, Vega introduced the ad by saying: “Mi papá taught me you should never spend more than you make. It seems like common sense, yet Biden, Pelosi and Spanberger have been driving up the cost of living with their reckless spending.”

Vega doesn’t give specifics about what spending she considers reckless and doesn’t elaborate on her social media. But she says that she has a plan “to eliminate wasteful spending and cut taxes” in Congress if elected.

According to the voluntary petition for Chapter 7 bankruptcy Vega and her husband filed, the Vegas reported owing creditors a total of $96,662 and having assets in the amount of $9,552. 

In bankruptcy cases filed after 2005, federal and private student loans are generally not dischargeable unless debtors can show that the loan payments impose an “undue hardship,” according to federal law.

“One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a ‘fresh start.’ The debtor has no liability for discharged debts,” according to the U.S. Courts website.

Among the liabilities included in the Vegas’ petition were unpaid state taxes to Maryland in the amount of $1,105 and $1,500 to Virginia, according to the petition.

The debts also included medical bills owed to Potomac Hospital in the amount of $3,661, according to the petition. 

The Vegas’ filings also sought discharge of a $1,280 debt owed to for-profit Corinthian College, which was in collections, and three Sallie Mae student loans that were opened in 2004 and 2005 for $28,468, $14,765 and $2,359, according to the petition. It’s not clear whether Yesli Vega or Rene Vega took out the student loans or if they involved schools other than Corinthian College.

In June 2022, the U.S. Department of Education announced it would discharge $5.8 billion in student loans borrowed to attend any campus owned or operated by Corinthian Colleges, Inc., citing its “widespread and pervasive misrepresentations” related to borrowers’ employment prospects. The action was the largest single loan discharge in U.S. history.

Spanberger says more should be done on student loans

Asked by the Prince William Times about her view on Biden’s student loan forgiveness plan, Spanberger said: “A lot of people are going to be helped significantly because of the president’s actions to forgive student loans.” 

But Spanberger also noted that the plan “leaves a lot of open-ended questions about college affordability” and said more needs to be done to allow borrowers to renegotiate the terms of their student loans and to allow them to be more readily discharged in bankruptcy proceedings.

“From a policy standpoint, allowing people to renegotiate their student loans needs to be a priority,” Spanberger said. “Recognizing the fact that if you go through bankruptcy, all [debts] can be forgiven except student loans, in regular circumstances, needs to be revisited.”

Spanberger also noted that she believes the federal government’s Public Service Loan Forgiveness program must be made more accessible for qualifying borrowers. The PSLF program forgives the remaining balance on federal loans after borrowers have made 120 “qualifying monthly payments” while working full-time for a “qualifying employer,” according to the studentaid.gov website.

Qualifying employers include governmental agencies, public school divisions, colleges and universities, as well as many nonprofit agencies, including private schools and colleges, the website says.