TOPICS
TOPICS
Education secretary defends oversight of student loan programs
Education Secretary Margaret Spellings announced Thursday that she is convening the heads of the Federal Trade Commission, Federal Deposit Insurance Corporation, Securities and Exchange Commission and Federal Reserve "to coordinate a governmentwide endeavor to end student loan abuse" in both the Federal Family Education Loan and private loan programs.
She used an appearance before the House Education and Labor Committee to defend her department's oversight of student loan programs and its response to disclosures of questionable ties between private lenders and college financial aid officials. And as lawmakers criticized her department, she turned the tables on them by asserting that Congress' failure to reauthorize the Higher Education Act since it expired in 2003 has made it "my duty to expedite reform."
Referring to higher education, Spellings said: "I've probably been the most active secretary in this arena in a long time."
As she went on the offensive, House Education and Labor Chairman George Miller, D-Calif., took Spellings to task for the mismanagement of student loan and the Reading First elementary school programs, declaring "the department hasn't acted on this with any haste or urgency."
A noticeably heated Miller told her, "When I look at the whole body of evidence that has been amassed . . . it is clear that, at a minimum, the Education Department's oversight failures have been monumental."
He and Education and Labor ranking member Howard (Buck) McKeon, R-Calif., co-sponsored legislation that easily passed the House Wednesday to bring more transparency to the industry's ties to colleges. The bill also seeks to halt potential conflicts of interest by banning school officials from accepting gifts, financial perks and kickbacks from lenders, who have doled out such sweeteners to earn a spot on preferred lender lists.
In her testimony, Spellings announced that an Education Department task force created in April to examine the industry will soon be recommending similar statutes, including a ban on inducements and more transparency behind the creation of preferred lender lists.
Citing areas of common interest, Spellings told committee members she wanted to use two bills Miller hopes to move this year -- the Higher Education Act and No Child Left Behind reauthorizations -- to improve oversight and education programs. She criticized the "high legal barrier" in the higher education law that requires the department to prove improper relations between schools and lenders before taking action.
"Federal student aid is crying out for reform," she added, urging the committee to pass a full five-year reauthorization of the higher ed law instead of a one-year renewal.
Miller said that even with congressional action, "my concern about the department is in the broad the sense of its image since 2001."
Miller recently widened his investigation into the department's dealings with student loan providers by requesting information from Spellings and White House officials dating back to the beginning of the Bush administration in 2001.
Miller has also formally asked the FTC to look into deceptive marketing practices within the lending industry.
COMMENTS
- Does anyone know who actually has oversight of the student loan programs? I'm getting ripped off by American Educational Service and I'd like to file a complaint -- but where? Larry Hubner Posted January 6, 2009 8:34 PM
- Defense? Defense of what? Ok let me explain to you my experience with the "STUDENT LOAN" program... Since 1993, over 70,000 dollars in false notes were issued in my social security number... On MY CREDIT REPORT, they were reported IN TRIPLICATE to all three bureaus so ridiculously so that at one point TransUnion Said that I had outstanding 240,000 in Student Loans. It took THREE Years to get a Guarantor agency to release my loans... and when they did they overpaid themselves FROM THE US Government and yours and My Tax dollars to OVER 80,000 dollars.. That's right they flat out stole 80,000 dollars of our tax money from the Feds... Then they continued to maintain that at no time had they misreported any notes nor had they done any financial "DAMAGE" to the party whom they had falsely reported these notes ABSENT.... 1) any promissory note of any kind 2) any IDENTIFYING information such as a Driver's license ... All they did was use my SOCIAL Security number and they successfully from what I can gather paid themselves 178,804 dollars. AND idiot wants to try and sell you a Bag of Goods... ... OVERSIGHT Is correct? Are you kidding me? These people are lower than the lowest rungs of Plankton that exist on the underside of a Columbian drug runners skank mobile boat. I NEVER once in my entire life have EVER attempted to take advantage of another's personal information for personal gain... yet they have backdoored every possible means and pathway to enrich a group of people who frankly have ROBBED the US Public blind MUCH MUCH MORE than any Enron Scandal ever could. Brian Kelly Posted June 22, 2007 2:54 AM
- It is well known for sometime that at the Tucson VA Vocational rehab center. That the senior staff routinely pad the hours of their work study personel. They pay them their full salary regardless if they are at work or not. Favoritism is rampant. Many attend work less then 3 days of the week with no loss in pay. There is absolutley no accountability. The problem stems from no need to clock in or out. That plan could also be circumvented, and customer service for vets suffers greatly. This is one location, at the cost of thousands of federal funds lost to non productivity. How many more locations are this way? Is this the next front page media black eye? James Perrine Posted May 14, 2007 12:18 AM
