AMEN Mr. Miller

Miller used often harshly critical language to paint a picture of a student loan industry out of control and to accuse the Education Department of having more or less let it happen through inadequate oversight.

kgotthardt, at 8:10 am EDT on April 19, 2007

Too Far

I am all for eliminating inducements and the appearance of inducements, but as a recent law graduate, I have to ask, has anyone considered that preferred lender lists are actually HELPFUL to students? If my school had not had a preferred lender list, I would not have had any idea where to start my loan search. I probably would have gone to the local bank and ended up with a much higher rate than what I currently have. My parents are immigrants, and the idea of taking out nearly a hundred thousand in education loans was a hard enough sell without making it harder to understand the process and the terms that lenders provide. Keep preferred lender lists! As someone said above, the problem is not the interest rates (though they could be lower)—it’s the loan principal! Let’s work on reducing tuition before we all point fingers at the lenders. Tuition increases have far outpaced inflation over the past 30 years—but the knowledge that college graduates leave with is far less. Let’s start reversing the tuition trend, stop buying fancy electronic gadgets with little educational purpose, and start putting more money in pedagogical research.

SRK, at 10:05 am EDT on April 19, 2007

Calling Out Spellings on Student Loans

Sooo. . . much to say and sooo. . . little time and space! Yet another case of too little too late! For years the regional staff of the Direct Loan Program had been feeding information into the Washington people responsible for the overall management of Federal Student Aid, not just Direct loans. We had conferences, training sessions, and all manner of meetings with our ‘Headquarters’ superiors regarding ALL these areas of concern and the effects, as we understood them, on the students/borrowers and the program. Not the least of the effects concerning us was knowing that we were charged with implementing the Federal Direct Student Loan Program (an incredible success story — never told) and then having our every turn undermined by the overriding ‘political agenda’ or just plain ignorance of the facts. You have stated correctly that the Department of Education through its lack of oversight (a term that should be clearly defined in other than Department of Education terms!!), its weakness in succumbing to the politics and the pressure brought to bear by the lenders, secondary markets and other financially interested parties, and myriad other factors, not the least of which is the Congress itself with its ‘enabling’ laws, could not possibly manage the scope, size and complexity of the student loan programs while having the ‘rug’ pulled out from under. So, enter the big guns — YOU KNOW WHO THEY ARE — and they overwhelmed the Department of Education with their smoke and mirrors, esoteric financial language, and they stole the programs from the people of the United States — and Congress and the Department of Education let them do it! They could not have done this without our help! Ahh! A solution raises its head — let’s create a Performance Based Organization (PBO), perhaps a recognition that the management skills of the Department were not up to the task. And there came to be a PBO. For those of us working there at the time we had the hope of perhaps seeing this enormous financial enterprise being managed, as it truly is, the single largest ‘banking’ entity in the world, nothwithstanding it had only one product, student loans. Just look at the history of those brought in to head up this PBO and one can’t help but think — ‘Sure enough, they could not have taken the (student loan) programs away from us without our help!’ One could go on and on. Just one more thing -the frantic and often frightened calls from students and parents alike asking ‘. . .how did they get that information about me?’ We knew a long, long time ago that the data-mining by anyone and everone with access to the student loan data base was not a good idea beyond necessary information in order to make a ‘good’ loan decision for the borrower. Our cries fell on deaf ears. Sadly — we have lost our way! and the taxpayers are paying a heavy price. Forgive the sad musings of an ex-Dept of ED manager.Just Me!

David, Retired US Dept of Edumacation, at 10:25 am EDT on April 19, 2007

student loans

education reporter eager to hear student aid experiences including from students with loans, from current or former education department staff. especially would like to hear from kgotthardt and from david sam dillon contact dillon at nytimes dot com

sam dillon, journalist at the new york times, at 11:20 am EDT on April 19, 2007

When politics trumps policy

I confess having dreaded what the Spellings era would bring at its dawning. As one whose policy views are often in direct contrast to the early turns of the Bush administration and Paige Dept. of ED(NCLB, etc.), I expected a lot of political machinations to continue when Spellings took over.

But from my perspective, she’s actually been pretty quiet and methodical. And while I don’t love everything that’s come down the pike, I think she’s done a respectable job with the problems she inherited.

The bigger problem in the last few years has really been Congress itself. But of course it’s easier for Mr. Miller to make hay picking on Secretary Spellings than in directly criticizing peers in the House and Senate who likely bear much greater responsibility for the current state of affairs.

I’ve always voted Democrat (and wish even they leaned further left), so this is not partisan defense of Spellings.

The real problem the system has today is twofold: A) that certain persons have figured out how to make a significant personal profit (Lord, Boehner, et al) out of what in theory is a program for the public good.B) that those like Mr. Miller who insist they are here to ‘clean up the corruption and mess’ really have little true understanding of how the system works (and doesn’t).

Attacking Spellings is good political hay because of the external problems she can be linked to, but of everybody in the entire Bush retinue, she’s one of the last persons I would go after. Especially compared to others who seem to have well-earned some public scrutiny.

Spellings? Eh. She’s done pretty well with what she was given. A lot of the problems in the financial aid system derive from a long period of political neglect — both from Congress, state legislatures, and from college presidents. For starters, Mr. Miller can explain when exactly the HEA will actually be re-authorized...

While it may appear the apples are suddenly dropping from the tree in droves, in truth the tree has been diseased and neglected for many, many years.

And in closing, I might suggest that instead of garnering headlines by attacking Ms. Spellings, Mr. Miller would much better serve his country by gaining a more in-depth understanding of much more fundamental issues that impact every student pursuing financial aid — the FAFSA form, inequities in Needs Analysis, streamlining program/fund design and delivery, and on and on.

There are other looming issues in financial aid that he may not even have considered, but addressing them will require actual research and thought, and what comes out of any policy change might not even make the front page of the Chronicle of Higher Ed.

Attacking Spellings? Well heck, that requires very little actual care or research, and will certainly make the front page of some newspaper somewhere cuz suddenly this one aspect of financial aid is sexy, apparently.

But alas, when the ’student loan scandal’ passes for the next great scandal (perhaps public backing of risky mortgage loans secured by Fannie Mae?), Mr. Miller’s attention on financial aid will likely be long gone, but most of the current problems will still be here. Some of that is the fault of schools, some the fault of lenders, but certainly some lies with our fine legislative branch as well.

To be honest, I’m not sure IHE’s reporting on this topic helps actually promote an understanding of the underlying issues involved, though certainly it keeps us in tune with the hubbub. In any reporting of politics, it would help to focus not only on the politics involved, but on the actual policy issues. Unfortunately most journalists (and politicians) seem to have long lost track of the distinction between the two.

Just my (verbose) $.02.

-Anon

Left coast lefty, at 1:01 pm EDT on April 19, 2007

Very cute blind man

You’d never ask for anything as compromising as an SSN unless you were fully aware of the jeopardy you place both the person posting and the owner of any SSN when you ask for this information. Pretty disingenous for a blind man.

finaidfollies, at 5:56 pm EDT on April 19, 2007