November, 2018
Washington -- A formidable iron triangle is buckling and may be about to break. As described* in earlier posts, its three corners consist of an industry that profits from the exploitation of federal student aid programs, the U.S. Department of Education, and the U.S. House Committee on Education and the Workforce.
Several successful lawsuits have weakened the triangle and others are pending. The suits have been brought by student loan borrowers, state attorneys general, the Consumer Financial Protection Bureau, and non-profit consumer protection organizations.
Those benefiting from the triangle are fighting back by moving key people through the triangle's revolving doors to shore up House and Department of Education staff, by delaying implementation of court orders, by suppressing audit and program review findings, by cutting off inter-agency agreements, and by attempting to preempt state consumer protection laws.
The newest threat to the iron triangle's grip is the upcoming shift in majority control of the House of Representatives. Newly energized Democrats, if they choose to do so, can hold oversight hearings with subpoena powers to look at the nation's student loan mess, especially to see how the Department of Education's corner of the iron triangle contributed to it.
The oversight hearings will likely be led by the House Government Oversight and Reform Committee and the House Education and the Workforce Committee. Other committees may also conduct oversight, as the student loan crisis extends to committee jurisdictions involving veterans, financial services, and appropriations.
The hearings should be conducted before, or at least in conjunction with, the reauthorization of the Higher Education Act. A goal of the hearings should be to determine whether the problems at the Department of Education can be fixed or if the Department is so irreparably broken that Congress must look to other countries, as many are suggesting, for more workable student aid models.
A first question must deal with the cause of the dysfunction. There can be no dancing around the role of corruption and racketeering.** Why, when fraud and perjury are discovered, does nothing happen to remedy it? Indeed, this should be the focus of oversight hearings.
I have worked at many different positions in higher education: in the institutions, in the states, in the associations, in the Senate, in the Department of Education. My work has extended to eleven years of litigation leading to the successful precedent that has enabled several of the aforementioned lawsuits. It is my sad conclusion, after all this, that the Department of Education has been captured, through corruption and racketeering, by the industry it is supposed to regulate, and that there is no alternative but to start over.
I'll be ready to assist however I can in oversight first, then reauthorization.
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*See Iron Triangles, Parts I - VIII
** Racketeering has previously been alleged in student loan lawsuits brought by borrowers, but without the particularity that may now become available through oversight hearings. The hearings will afford an opportunity to look at patterns of racketeering that link revolving door conflicts of interest to fraud and perjury over a period of years, for which there is ample evidence. Another area ripe for racketeering oversight is obstruction of justice, which comes into question when the Department of Education terminates information sharing agreements essential to prosecution of fraud, seeks to obstruct state consumer protection law enforcement through federal preemption, and defies court orders to implement student loan forgiveness and cancellation.
