June, 2019
Washington -- Republic Report has picked up on startling testimony from last month's Congressional oversight hearing on for-profit colleges. I watched the hearing as it was streamed live and was likewise perplexed by the statements of Department of Education official Diane A. Jones about approval of troubled accreditor ACICS. From the Republic Report:
Jones testified that “it was not the [Trump] administration that decided to change the decision of the prior [Obama] administration”; rather, she said, the Department reinstated ACICS because “the courts made that decision.”
But it was the Trump administration. The courts may have required a new determination, but not the outcome. The Jones statement, under oath, is guileful and perjurious. Thousands of borrowers and families have suffered from the decision. As have taxpayers, who will have to pay the bill for the mess left behind. The beneficiaries of the decision are predatory schools and lenders.
This is not Ms. Jones' first brush with untruthfulness. It is a pattern. She is a long-time industry servant in an iron triangle that from time to time captures the Department of Education to put private profit ahead of public mission.
In the previous decade, when Ms. Jones was Assistant Secretary for Postsecondary Education, she attempted to cover up student-loan subsidy fraud in the Department by claiming that there was no way to determine its existence or amount. She told investigator Amit Paley of the Washington Post that the numbers he reported were flawed, after the Post assembled a panel of outside experts to determine how much was involved. "We don't believe meaningful inferences can be made from the data the department provided," Ms. Jones said, to try to deflect attention from the scandal.
This was months after the Inspector General had already documented illegal claims and had made detailed determinations of the amounts involved, which totaled hundreds of millions of dollars and were independently corroborated by the Post's panel of experts.
Reporter Sam Dillon of the New York Times had written on the same subject a few months earlier and interviewed me about the illegal claims and how they were made. I had retired from the department two years earlier and knew much about the matter. The NYT followed up with an editorial against waste and fraud. The next day, Sam Dillon told me later, he went to the Department of Education to confront officials with evidence that some at the department had actually been party to schemes to defraud the government. He had two former deputy secretaries and one assistant secretary in mind. Sam Dillon was so angry, he told me, that he yelled at the officials because they knew of the schemes all along and did nothing. He tried to write another, even harder-hitting story but was rebuffed by his editors, for reasons unknown. Had he only been permitted to do so, the ensuing history of corruption and racketeering at the department may have been curtailed.
In last month's testimony, Ms. Jones was aided in her answers by questions from Congresswoman Virginia Foxx, who made certain the oversight subcommittee was told once again, incorrectly, that it was a court, and not the Trump administration, that forced the disastrous reinstatement of ACICS.
Staffing Rep. Foxx on postsecondary education matters has been Kathleen Smith, formerly of the Department of Education but also a key figure in the government-industry revolving door going back two decades. Ms. Smith was once a lobbyist representing lenders making the fraudulent subsidy claims that Ms. Jones was intent on covering up. Ms. Smith, while a department official in the Trump administration, was more recently instrumental in cutting off information-sharing agreements with the Consumer Financial Protection Bureau and helped lead the ongoing effort to preempt state attorneys general from acting against unlawful student-loan servicer practices. As key staff to the ranking member of the House committee writing the reauthorization of the Higher Education Act, Ms. Smith landed herself in the iron triangle position to write the laws for which Ms. Jones will create and administer regulations.*
Some of the iron triangle activity has come to light as the result of discovery in 2017 litigation. Hugely problematic is the failure of officials to recuse themselves for conflicts of interest, or for violations of recusals. It is compounded by clumsy attempts by the Trump administration to intimidate the Office of Inspector General, especially as it looks at irregularities in the reinstatement of ACICS. Only the willfully blind cannot see the industry-based, revolving-door network that undermines the mission of the department, at huge cost to students, families, and taxpayers.
As Republic Report notes, Ms. Jones is overwhelmingly conflicted by her past dealings with the very parties she is now ostensibly regulating. Unfortunately, recusal abuse at the department is not a new development. It goes back many years and remains unchecked, even though by law it is a criminal offense.
Ms. Jones testified that she wants everyone to have the same educational opportunities she had. But her actions on ACICS have put some 18,000 students deeper in debt with worthless credits to show for it. Congress has a responsibility to rebuke such testimony.
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*The revolving door recently turned again for Kathleen Smith, who has since become the Washington-based lobbyist for troubled student loan servicer PHEAA.
The Speaker's Dilemma and Options
June, 2019
Washington -- House Democrats have worked themselves into a dangerous dilemma: should the decision to impeach the president be decided on moral or on political grounds? The argument is strong to impeach on the former, given the moral unfitness of the president, but less so on the latter, given the likelihood that a drawn-out impeachment process with no conviction would only tighten vice's, not virtue's, grip on power. Doing the right thing morally might result in political defeat, leaving both morals and politics in shreds.
I think it was a mistake for the Speaker not to act immediately after receiving the Mueller Report, with all dispatch, both to impeach and to censure the president. That would have avoided the current, foreseeable impasse. Democrats would have done the right thing and could have moved on to their legislative agenda. The moral dilemma would then be for Senate Republicans to deal with.
But that did not happen, so what now?
I believe a good option for the House would be to pass a censure action, which accomplishes the moral imperative without the downside of impeachment. There is ample cause for censure, to include failure to comply with Article I powers of the legislative branch. However, the House should also open an impeachment inquiry to gather further evidence on other impeachable offenses and broaden it beyond the questions of the Mueller Report.
The Mueller Report dealt with only two issues: Russian election-tampering and obstruction of justice. The House Oversight and Judiciary committees should look beyond those subjects to include whether the president is fulfilling his constitutional obligation to enforce the rule of law in our overall federal system. The committees should use their powers to look at issues affecting others in our system who are also required to take an oath to uphold our Constitution and statutes, namely governors and state attorneys general. Are they able to fulfill their responsibilities faithfully under law given the actions of the Trump administration?
There are abundant examples of the use of illegal and unethical measures by the president to thwart the rule of law throughout the country, which should be added to the evidence for impeachment. These actions deal with a wide range of issues that adversely affect people's lives. Many have already resulted in lawsuits and petitions by state attorneys general, of both political parties, against the Trump administration. Many have not, leaving Americans with no place to turn when their lives are upended by a failure of the rule of law at all levels of government.
This review would provide an opportunity for ordinary Americans to form opinions on impeachment as it affects their everyday lives, their health and safety, their consumer protections, their human rights under law. Such opinions need time to ripen, once evidence is compiled. If the House censures the president on separation of powers and moral grounds, it will have done at least part of its duty and public opinion can solidify, or not*, on impeachment. In the meantime, the House can get on with doing the legislative work expected of it.
____________________________
*There is no guarantee, of course, that voters value the rule of law in their lives above other values they hold. George Will has written, "Trump was elected because many millions of Americans enjoy his boorishness. And he essentially promised to govern as a lout. Promise-keeping would be an unusual ground for impeachment." These are times that surely test Americans' character and values.
Washington -- House Democrats have worked themselves into a dangerous dilemma: should the decision to impeach the president be decided on moral or on political grounds? The argument is strong to impeach on the former, given the moral unfitness of the president, but less so on the latter, given the likelihood that a drawn-out impeachment process with no conviction would only tighten vice's, not virtue's, grip on power. Doing the right thing morally might result in political defeat, leaving both morals and politics in shreds.
I think it was a mistake for the Speaker not to act immediately after receiving the Mueller Report, with all dispatch, both to impeach and to censure the president. That would have avoided the current, foreseeable impasse. Democrats would have done the right thing and could have moved on to their legislative agenda. The moral dilemma would then be for Senate Republicans to deal with.
But that did not happen, so what now?
I believe a good option for the House would be to pass a censure action, which accomplishes the moral imperative without the downside of impeachment. There is ample cause for censure, to include failure to comply with Article I powers of the legislative branch. However, the House should also open an impeachment inquiry to gather further evidence on other impeachable offenses and broaden it beyond the questions of the Mueller Report.
The Mueller Report dealt with only two issues: Russian election-tampering and obstruction of justice. The House Oversight and Judiciary committees should look beyond those subjects to include whether the president is fulfilling his constitutional obligation to enforce the rule of law in our overall federal system. The committees should use their powers to look at issues affecting others in our system who are also required to take an oath to uphold our Constitution and statutes, namely governors and state attorneys general. Are they able to fulfill their responsibilities faithfully under law given the actions of the Trump administration?
There are abundant examples of the use of illegal and unethical measures by the president to thwart the rule of law throughout the country, which should be added to the evidence for impeachment. These actions deal with a wide range of issues that adversely affect people's lives. Many have already resulted in lawsuits and petitions by state attorneys general, of both political parties, against the Trump administration. Many have not, leaving Americans with no place to turn when their lives are upended by a failure of the rule of law at all levels of government.
This review would provide an opportunity for ordinary Americans to form opinions on impeachment as it affects their everyday lives, their health and safety, their consumer protections, their human rights under law. Such opinions need time to ripen, once evidence is compiled. If the House censures the president on separation of powers and moral grounds, it will have done at least part of its duty and public opinion can solidify, or not*, on impeachment. In the meantime, the House can get on with doing the legislative work expected of it.
____________________________
*There is no guarantee, of course, that voters value the rule of law in their lives above other values they hold. George Will has written, "Trump was elected because many millions of Americans enjoy his boorishness. And he essentially promised to govern as a lout. Promise-keeping would be an unusual ground for impeachment." These are times that surely test Americans' character and values.
What Farmers Are Really Thinking
May, 2019
Lincoln -- While driving a few miles northward from Lincoln to visit the farming community of my youth, where I still have deep roots, I heard Nebraska Governor Pete Ricketts come on the radio to tell a national audience what Nebraska farmers were thinking about the collapse of Trump's trade talks with China.
The governor said Nebraska farmers were telling him to support the president, even if it hurts them. The sacrifice is worth it, to make China stop stealing intellectual property, according to Nebraska farmers to whom the governor talks. The governor also assured the radio audience (twice) that low crop prices were not the result of the trade war, as prices had been low since 2013. Not to worry about the trade war's effect on prices, so to speak.
To my ears, this was the most incredible statement made by a Nebraska governor about farmers since Norbert Tiemann. When asked if farmers were happy with the Nixon Administration's economic policies, Tiemann said he had "never seen any happy farmers any time." Which may have cost Tiemann the next election.
Nebraska farmers I talk to are not all that informed about intellectual property issues with China, let alone willing to lose their farms because of them. Most farmers had never heard of the issue until they were told it was their patriotic duty to be a pawn in the fight over such matters as copyrights and knock-off products. If they claimed otherwise, let alone said they'd willingly risk their farms over it, they'd be taken for liars or fools, and everybody knew it.
And they don't think low prices should be written off so casually by the governor or anyone else, as if prices were merely something farmers grumble about, rather than something to be urgently addressed.
The farmers I talk to are more knowledgeable about how they are being squeezed, as evidenced in this article from the Lincoln JournalStar:
A...report released Thursday by the Federal Reserve Bank of Kansas City shows that agricultural credit conditions continue to deteriorate in the seven states served by the bank.
In fact, some of the worst conditions were in Nebraska, which had the second-biggest year-over-year drop in farm income, the largest drop in capital spending, the biggest drop in farmland values and the largest percentage of ag producers struggling to produce enough cash flow to service their debt.
But my farmer friends and colleagues also know that the Democratic Party is not sure it cares about what is happening in rural America or not. Some within the party are pleased to see the distress visited by President Trump on the voters who supported him. Some believe Democrats should work only on their urban base and not challenge Republicans on rural issues.
This is not only misguided but a sure way for Democrats to lose the next elections at all levels. Are these Democrats even remotely aware of the pain Republicans are inflicting on rural America?
Rural voters have only so much patience before tipping elections away from those who have hurt them so much for so little. China trade practices could have been handled more easily through WTO, TPP, and our allies. If only that had been the chosen course. Farmers know that.
What farmers of all stripes – conservatives especially – are really thinking is at what point do they call a halt to support for a president who repeatedly damages their economic interests, let alone violates on so many occasions their basic sense of values and decency. That point is soon approaching.
Lincoln -- While driving a few miles northward from Lincoln to visit the farming community of my youth, where I still have deep roots, I heard Nebraska Governor Pete Ricketts come on the radio to tell a national audience what Nebraska farmers were thinking about the collapse of Trump's trade talks with China.
The governor said Nebraska farmers were telling him to support the president, even if it hurts them. The sacrifice is worth it, to make China stop stealing intellectual property, according to Nebraska farmers to whom the governor talks. The governor also assured the radio audience (twice) that low crop prices were not the result of the trade war, as prices had been low since 2013. Not to worry about the trade war's effect on prices, so to speak.
To my ears, this was the most incredible statement made by a Nebraska governor about farmers since Norbert Tiemann. When asked if farmers were happy with the Nixon Administration's economic policies, Tiemann said he had "never seen any happy farmers any time." Which may have cost Tiemann the next election.
Nebraska farmers I talk to are not all that informed about intellectual property issues with China, let alone willing to lose their farms because of them. Most farmers had never heard of the issue until they were told it was their patriotic duty to be a pawn in the fight over such matters as copyrights and knock-off products. If they claimed otherwise, let alone said they'd willingly risk their farms over it, they'd be taken for liars or fools, and everybody knew it.
And they don't think low prices should be written off so casually by the governor or anyone else, as if prices were merely something farmers grumble about, rather than something to be urgently addressed.
The farmers I talk to are more knowledgeable about how they are being squeezed, as evidenced in this article from the Lincoln JournalStar:
A...report released Thursday by the Federal Reserve Bank of Kansas City shows that agricultural credit conditions continue to deteriorate in the seven states served by the bank.
In fact, some of the worst conditions were in Nebraska, which had the second-biggest year-over-year drop in farm income, the largest drop in capital spending, the biggest drop in farmland values and the largest percentage of ag producers struggling to produce enough cash flow to service their debt.
But my farmer friends and colleagues also know that the Democratic Party is not sure it cares about what is happening in rural America or not. Some within the party are pleased to see the distress visited by President Trump on the voters who supported him. Some believe Democrats should work only on their urban base and not challenge Republicans on rural issues.
This is not only misguided but a sure way for Democrats to lose the next elections at all levels. Are these Democrats even remotely aware of the pain Republicans are inflicting on rural America?
Rural voters have only so much patience before tipping elections away from those who have hurt them so much for so little. China trade practices could have been handled more easily through WTO, TPP, and our allies. If only that had been the chosen course. Farmers know that.
What farmers of all stripes – conservatives especially – are really thinking is at what point do they call a halt to support for a president who repeatedly damages their economic interests, let alone violates on so many occasions their basic sense of values and decency. That point is soon approaching.
Robert F. Smith's Gift at Morehouse
May, 2019
Washington -- Robert F. Smith's loan cancellation gift to 2019 Morehouse College graduates is getting attention for both good and bad reasons.
If I had his attention I'd shout: "Stop Before You Give Again!"
If someone wants to help with the student debt crisis, there are much better ways to do so. I could give Mr. Smith a list of non-profit charities that for a fraction of his generosity could do multiples more good. If Mr. Smith should happen to see this, I have a list ready. It includes my own charity, which has been remarkably effective with far less money.
Among the more reasoned responses to the Morehouse gift was one from Michelle Singletary, a personal finance columnist who understands paying-for-college issues. She raised the "equity" issue but also puts it into perspective. The gift is inequitable, but don't get too upset about it.
Earlier this month I addressed Elizabeth Warren's debt cancellation plan and found it wanting from the standpoints of both individual and institutional equity. My hope is not to discourage such plans, but to show how they can be improved.
Washington -- Robert F. Smith's loan cancellation gift to 2019 Morehouse College graduates is getting attention for both good and bad reasons.
If I had his attention I'd shout: "Stop Before You Give Again!"
If someone wants to help with the student debt crisis, there are much better ways to do so. I could give Mr. Smith a list of non-profit charities that for a fraction of his generosity could do multiples more good. If Mr. Smith should happen to see this, I have a list ready. It includes my own charity, which has been remarkably effective with far less money.
Among the more reasoned responses to the Morehouse gift was one from Michelle Singletary, a personal finance columnist who understands paying-for-college issues. She raised the "equity" issue but also puts it into perspective. The gift is inequitable, but don't get too upset about it.
Earlier this month I addressed Elizabeth Warren's debt cancellation plan and found it wanting from the standpoints of both individual and institutional equity. My hope is not to discourage such plans, but to show how they can be improved.
Reviewing Two Think-Tank Reports
May, 2019
Washington -- What would we do without Washington think-tanks? Their staffs provide scholarly analyses and recommendations on a wide variety of issues. They are important watchdogs of federal agencies.
Two recent think-tank reports on higher education issues are especially noteworthy, both for their insights and their limitations.
One is New America's report, "Closing the Evidence Gap: Doing More of What Works in Higher Education" by Clare McCann. She takes the Department of Education and the Congress to task for failing to evaluate programs like TRIO and GEAR UP. She identifies the lobby group that has successfully opposed evaluation of TRIO for decades. Too often such studies are loath to take on political realities. That is not the case here.
If anything, however, she could have gone further to give more context to these two programs. They are small potatoes when it comes to overall federal spending on higher education access and success. Pell and the Campus-Based programs, much larger, are not evaluated either, due to resistance not only in the higher education community, but also within the statutorily responsible evaluation office itself, the Department's independent Institute of Education Sciences. Although the situation is now improved with the appointment of Mark Schneider as IES director, when Grover Whitehurst was in the post he proposed an IES legislative authorization that omitted post-secondary programs entirely. Fortunately, the IES statute that Congress eventually authorized contains authority for IES to carry out post-secondary research and evaluation, even though there is currently little meaningful activity under the authority.
As Clare McCann correctly notes, the Government Performance and Results Act (GPRA) is applicable and places an obligation on the Department of Education to conduct performance evaluations of all its programs as well. Too bad GPRA has become a dead letter in the Trump Administration.
Although both the current reality and the historical context are working against evaluations of TRIO and other higher education programs, Clare McCann's report should be on every committee member's desk as Congress goes about reauthorization of the Higher Education Act. All HEA programs badly need better evaluation.
The other report of special note is "Ensuring Accountability and Effectiveness at the Office of Federal Student Aid," by Ben Miller of the Center for American Progress and Jason Delisle of the American Enterprise Institute.
The value of this report is that it pulls together the history of the Office of Federal Student Aid as a Performance Based Organization, or PBO. Of particular help is a discussion of the PBO concept and the other federal offices that became PBOs as well, and how they contrast with OSFA.
Again, however, the report could use broader context. It looks at OSFA in terms of its formal creation and organization as a PBO, more or less antiseptically. For a more complete understanding it would be good to look at the informal networks and communication channels that shaped the PBO from its beginning to its current condition. Such a look is beyond the scope and purpose of the CAP/AEI report, but the following observations hint at how this different lens could affect conclusions.
The CAP/AEI report suggests that excessive waste and fraud in student aid programs in "the 1990s" led to the creation of OSFA as a PBO in 1998. Actually, dysfunctional personnel networks were a more proximate tripwire.
To be sure, the early 1990s were plagued with for-profit school fraud and high student loan default rates, but those problems were quickly addressed by Secretary Richard Riley early in his tenure. Thousands of for-profit schools were eliminated from federal student aid eligibility and student loan defaults plummeted quickly as well. Much credit for this should go to Senator Sam Nunn, who held a series of high-profile hearings on these issues and to whom Secretary Riley gave his pledge to clean things up.
But even as Senator Nunn was pleased at the success of the Secretary's attack on fraud and waste, people in the Department's second tier of leadership were often unable to work out their differences as to how OSFA operated as a part of the larger Office of Postsecondary Education. OPE was headed by David Longanecker as Assistant Secretary, with Maureen McLaughlin as Deputy Assistant Secretary. Both had formidable policy and analytical strengths from their years at the Congressional Budget Office. OPE's Deputy Assistant Secretary for its OSFA component was Leo Kornfeld, whose orientation was operational, based on his many years in the student loan industry. The Clinton Administration in its second term saw the creation of a PBO as a way to resolve leadership conflicts by splitting OSFA off from OPE. OPE would still set policy, but a separate, independent OSFA would handle operations and regulatory compliance for student financial aid programs.
Not that the Department under Secretary Riley had resolved all student loan administration problems prior to the creation of the PBO in 1998. Its Direct Loan contractors in mid-decade fell seriously behind in loan consolidations, making applicants wait weeks and even months to consolidation their loans to qualify for lower interest rates and other benefits. The solution, however, was not the creation of the PBO; rather it was to allow FFEL lenders to consolidate Direct Loans into the FFEL program under the so-called Two-Way Loan Consolidation amendment that Congress approved. That created its own set of problems when FFEL entrepreneurs set up boiler-room operations to lure borrowers into FFEL loans not to relieve a consolidation backlog but to win federal FFEL subsidies. It was the Federal Trade Commission that finally took action against some of the worst of the FFEL operators who misused the Department's name and logo.
After the PBO was created legislatively, Greg Woods became its COO. Unfortunately -- Greg was a talented administrator without conflicts of interest -- he passed away soon after he took the reins at OSFA. His major accomplishment was to move OSFA physically to a better workplace, well distant from the rest of the Department of Education. We are left to wonder how the Woods PBO would have asserted its new independence in combating fraud and waste through statutory and regulatory compliance measures, which were now its primary bailiwick. Appointment of his successor was left to President Bush's Secretary of Education, Rod Paige, who chose Theresa Shaw, a former student loan industry executive, as the COO.
In the Shaw era, OSFA took not only its policy signals but also its compliance approach from Bush Administration political appointees. For example, in 2002 compliance questions appropriately raised of OSFA by FFEL lenders were passed on by OSFA personnel, inappropriately, to political officials, most notably to the office of Deputy Secretary William Hansen, who was officially recused from such decisions because he had been a leading industry lobbyist. In 2003, an OFSA unfavorable compliance review of a different lender was incorrectly reversed after the lender discussed the review with political appointees. (The original finding took four years to be restored.) In 2006, the Inspector General wrote a report condemning OSFA for its failure to exercise its compliance function properly. That same year, Assistant Secretary Sally Stroup at OPE gave inside advice to a lender's lobbyist as to how to deal with an upcoming IG audit.
These examples are merely illustrative of the many informal and extra-legal relationship networks that transcended the formal organizational boxes establishing the PBO legislatively.
Secretary Paige's successor, Margaret Spellings, did not extend Theresa Shaw's appointment as COO for another term. Among the reasons had to be OSFA's failure to police itself: one OSFA executive, Matteo Fontana, accepted stock from a company he was regulating. This was also a time when compliance efforts were so weak at OSFA that student financial aid officials at UT-Austin, Columbia, USC, and Johns Hopkins routinely accepted favors from student loan companies in exchange for recommending them to students as preferred lenders. At a loan servicer, compliance measures of the time coming from the Department were characterized as "pathetic" and "weak-minded."
In other words, looking at the PBO from the standpoint of lobbying and political networks leaves an even less flattering view than the CAP/AEI report, which itself was equivocal about the success of the PBO.
I cannot conclude, based on close personal observation over many years, that the PBO in its first decade of existence improved operations or compliance in any way compared to the former organizational arrangement. Of course we don't know what would have happened had OSFA not been re-created as a PBO, but it's hard to imagine a worse outcome. This is not to discredit some fine work within the PBO done by talented and dedicated employees, but I would also note that too many of the bonuses given out in the Shaw era were based on allowing the PBO to be undermined by political and industry revolving-door networks.
One bright spot for OSFA was the conversion of schools from FFEL to Direct Loans in 2010 and 2011. This accomplishment, however, was greatly aided from the outside by volunteers from Direct Loan schools who undertook the training of their counterparts at FFEL schools.
Regrettably, the second decade of the PBO's existence did not give its reputation an overall reprieve. If anything, the situation grew worse. The aftermath of the Great Recession saw a recurrence of for-profit school fraud that dwarfed what the Nunn Hearings uncovered in the late 1980s and early 1990s. The Public Service Loan Forgiveness program, contracted to servicer FedLoan by the PBO, never got on track and is now a national scandal. The Ombudsman's office, housed in the PBO, never became effective as an advocate for borrowers. Only with the creation of the Consumer Financial Protection Bureau did borrowers gain a real voice in the halls of the federal bureaucracy. The CFPB sued a leading student loan servicer, Navient, for compliance failures that should have been corrected by the PBO. The list goes on and on, the failures escalating, the aroma of corruption permeating the fabric of the entire enterprise.
The CAP/AEI report is valuable as far as it goes. It deserves to be in the information binders of HEA reauthorizers as they look at OSFA as a PBO, but it should not be read as the last word until a more complete history of the PBO is fully told. While I endorse the report's recommendations for the HEA reauthorization, it is clear to me that another series of congressional oversight hearings, like those conducted by Senator Nunn's Permanent Subcommittee on Investigations, will be necessary if Congress and the public want real change. The sooner the better.
___________________________
Author's note: Much of the above OSFA/PBO history is public information and available from news accounts of the time. I also know it well because I was often literally in the room, as a civil servant working in the Office of Legislation and Congressional Affairs, from the time of Senator Nunn's conversations with Secretary Riley to the arrival of Secretary Paige. From there onward I pick up the thread of OSFA/PBO decision-making networks as a litigant against student loan fraud, based on discovery and depositions from 2001 onward. Much of that is also public information although little of it has been published.
Washington -- What would we do without Washington think-tanks? Their staffs provide scholarly analyses and recommendations on a wide variety of issues. They are important watchdogs of federal agencies.
Two recent think-tank reports on higher education issues are especially noteworthy, both for their insights and their limitations.
One is New America's report, "Closing the Evidence Gap: Doing More of What Works in Higher Education" by Clare McCann. She takes the Department of Education and the Congress to task for failing to evaluate programs like TRIO and GEAR UP. She identifies the lobby group that has successfully opposed evaluation of TRIO for decades. Too often such studies are loath to take on political realities. That is not the case here.
If anything, however, she could have gone further to give more context to these two programs. They are small potatoes when it comes to overall federal spending on higher education access and success. Pell and the Campus-Based programs, much larger, are not evaluated either, due to resistance not only in the higher education community, but also within the statutorily responsible evaluation office itself, the Department's independent Institute of Education Sciences. Although the situation is now improved with the appointment of Mark Schneider as IES director, when Grover Whitehurst was in the post he proposed an IES legislative authorization that omitted post-secondary programs entirely. Fortunately, the IES statute that Congress eventually authorized contains authority for IES to carry out post-secondary research and evaluation, even though there is currently little meaningful activity under the authority.
As Clare McCann correctly notes, the Government Performance and Results Act (GPRA) is applicable and places an obligation on the Department of Education to conduct performance evaluations of all its programs as well. Too bad GPRA has become a dead letter in the Trump Administration.
Although both the current reality and the historical context are working against evaluations of TRIO and other higher education programs, Clare McCann's report should be on every committee member's desk as Congress goes about reauthorization of the Higher Education Act. All HEA programs badly need better evaluation.
The other report of special note is "Ensuring Accountability and Effectiveness at the Office of Federal Student Aid," by Ben Miller of the Center for American Progress and Jason Delisle of the American Enterprise Institute.
The value of this report is that it pulls together the history of the Office of Federal Student Aid as a Performance Based Organization, or PBO. Of particular help is a discussion of the PBO concept and the other federal offices that became PBOs as well, and how they contrast with OSFA.
Again, however, the report could use broader context. It looks at OSFA in terms of its formal creation and organization as a PBO, more or less antiseptically. For a more complete understanding it would be good to look at the informal networks and communication channels that shaped the PBO from its beginning to its current condition. Such a look is beyond the scope and purpose of the CAP/AEI report, but the following observations hint at how this different lens could affect conclusions.
The CAP/AEI report suggests that excessive waste and fraud in student aid programs in "the 1990s" led to the creation of OSFA as a PBO in 1998. Actually, dysfunctional personnel networks were a more proximate tripwire.
To be sure, the early 1990s were plagued with for-profit school fraud and high student loan default rates, but those problems were quickly addressed by Secretary Richard Riley early in his tenure. Thousands of for-profit schools were eliminated from federal student aid eligibility and student loan defaults plummeted quickly as well. Much credit for this should go to Senator Sam Nunn, who held a series of high-profile hearings on these issues and to whom Secretary Riley gave his pledge to clean things up.
But even as Senator Nunn was pleased at the success of the Secretary's attack on fraud and waste, people in the Department's second tier of leadership were often unable to work out their differences as to how OSFA operated as a part of the larger Office of Postsecondary Education. OPE was headed by David Longanecker as Assistant Secretary, with Maureen McLaughlin as Deputy Assistant Secretary. Both had formidable policy and analytical strengths from their years at the Congressional Budget Office. OPE's Deputy Assistant Secretary for its OSFA component was Leo Kornfeld, whose orientation was operational, based on his many years in the student loan industry. The Clinton Administration in its second term saw the creation of a PBO as a way to resolve leadership conflicts by splitting OSFA off from OPE. OPE would still set policy, but a separate, independent OSFA would handle operations and regulatory compliance for student financial aid programs.
Not that the Department under Secretary Riley had resolved all student loan administration problems prior to the creation of the PBO in 1998. Its Direct Loan contractors in mid-decade fell seriously behind in loan consolidations, making applicants wait weeks and even months to consolidation their loans to qualify for lower interest rates and other benefits. The solution, however, was not the creation of the PBO; rather it was to allow FFEL lenders to consolidate Direct Loans into the FFEL program under the so-called Two-Way Loan Consolidation amendment that Congress approved. That created its own set of problems when FFEL entrepreneurs set up boiler-room operations to lure borrowers into FFEL loans not to relieve a consolidation backlog but to win federal FFEL subsidies. It was the Federal Trade Commission that finally took action against some of the worst of the FFEL operators who misused the Department's name and logo.
After the PBO was created legislatively, Greg Woods became its COO. Unfortunately -- Greg was a talented administrator without conflicts of interest -- he passed away soon after he took the reins at OSFA. His major accomplishment was to move OSFA physically to a better workplace, well distant from the rest of the Department of Education. We are left to wonder how the Woods PBO would have asserted its new independence in combating fraud and waste through statutory and regulatory compliance measures, which were now its primary bailiwick. Appointment of his successor was left to President Bush's Secretary of Education, Rod Paige, who chose Theresa Shaw, a former student loan industry executive, as the COO.
In the Shaw era, OSFA took not only its policy signals but also its compliance approach from Bush Administration political appointees. For example, in 2002 compliance questions appropriately raised of OSFA by FFEL lenders were passed on by OSFA personnel, inappropriately, to political officials, most notably to the office of Deputy Secretary William Hansen, who was officially recused from such decisions because he had been a leading industry lobbyist. In 2003, an OFSA unfavorable compliance review of a different lender was incorrectly reversed after the lender discussed the review with political appointees. (The original finding took four years to be restored.) In 2006, the Inspector General wrote a report condemning OSFA for its failure to exercise its compliance function properly. That same year, Assistant Secretary Sally Stroup at OPE gave inside advice to a lender's lobbyist as to how to deal with an upcoming IG audit.
These examples are merely illustrative of the many informal and extra-legal relationship networks that transcended the formal organizational boxes establishing the PBO legislatively.
Secretary Paige's successor, Margaret Spellings, did not extend Theresa Shaw's appointment as COO for another term. Among the reasons had to be OSFA's failure to police itself: one OSFA executive, Matteo Fontana, accepted stock from a company he was regulating. This was also a time when compliance efforts were so weak at OSFA that student financial aid officials at UT-Austin, Columbia, USC, and Johns Hopkins routinely accepted favors from student loan companies in exchange for recommending them to students as preferred lenders. At a loan servicer, compliance measures of the time coming from the Department were characterized as "pathetic" and "weak-minded."
In other words, looking at the PBO from the standpoint of lobbying and political networks leaves an even less flattering view than the CAP/AEI report, which itself was equivocal about the success of the PBO.
I cannot conclude, based on close personal observation over many years, that the PBO in its first decade of existence improved operations or compliance in any way compared to the former organizational arrangement. Of course we don't know what would have happened had OSFA not been re-created as a PBO, but it's hard to imagine a worse outcome. This is not to discredit some fine work within the PBO done by talented and dedicated employees, but I would also note that too many of the bonuses given out in the Shaw era were based on allowing the PBO to be undermined by political and industry revolving-door networks.
One bright spot for OSFA was the conversion of schools from FFEL to Direct Loans in 2010 and 2011. This accomplishment, however, was greatly aided from the outside by volunteers from Direct Loan schools who undertook the training of their counterparts at FFEL schools.
Regrettably, the second decade of the PBO's existence did not give its reputation an overall reprieve. If anything, the situation grew worse. The aftermath of the Great Recession saw a recurrence of for-profit school fraud that dwarfed what the Nunn Hearings uncovered in the late 1980s and early 1990s. The Public Service Loan Forgiveness program, contracted to servicer FedLoan by the PBO, never got on track and is now a national scandal. The Ombudsman's office, housed in the PBO, never became effective as an advocate for borrowers. Only with the creation of the Consumer Financial Protection Bureau did borrowers gain a real voice in the halls of the federal bureaucracy. The CFPB sued a leading student loan servicer, Navient, for compliance failures that should have been corrected by the PBO. The list goes on and on, the failures escalating, the aroma of corruption permeating the fabric of the entire enterprise.
The CAP/AEI report is valuable as far as it goes. It deserves to be in the information binders of HEA reauthorizers as they look at OSFA as a PBO, but it should not be read as the last word until a more complete history of the PBO is fully told. While I endorse the report's recommendations for the HEA reauthorization, it is clear to me that another series of congressional oversight hearings, like those conducted by Senator Nunn's Permanent Subcommittee on Investigations, will be necessary if Congress and the public want real change. The sooner the better.
___________________________
Author's note: Much of the above OSFA/PBO history is public information and available from news accounts of the time. I also know it well because I was often literally in the room, as a civil servant working in the Office of Legislation and Congressional Affairs, from the time of Senator Nunn's conversations with Secretary Riley to the arrival of Secretary Paige. From there onward I pick up the thread of OSFA/PBO decision-making networks as a litigant against student loan fraud, based on discovery and depositions from 2001 onward. Much of that is also public information although little of it has been published.
Assessing Sen. Warren's Higher Education Plan
May, 2019
Washington -- Give Elizabeth Warren credit. She is the only presidential candidate in either party who is addressing the nation's student loan crisis realistically. I have differences with the details of her approach, but that must not overshadow her leadership. Warren deserves praise for three huge policy initiatives:
• She proposes help for millions of borrowers currently in inextricable student loan trouble (often not of their own making), in a way that would also help the nation's economy. Debt relief, through a means-tested approach, needs immediate action. In 2016, candidates Bernie Sanders and Hillary Clinton wrongly neglected the distress of borrowers in favor of vague promises for future generations. Warren's loan cancellation plan for current borrowers, conversely, has now demanded even the attention of those who for years touted student loans as "good debt." The Urban Institute, for example, has begun seriously to analyze cancellation effects and has had to withdraw mistakes in its earlier papers. Economists are now looking more seriously about the positive, life-changing effects of current debt cancellation, as explained in a new paper from the National Bureau of Economic Research.
• She proposes restoration of bankruptcy protections for both federal and private student loan borrowers. Warren is a co-sponsor of Senator Dick Durbin's new restoration bill, the case for which has been spelled out well by Mark Huelsman of Demos. This is not a partisan issue; the companion bill in the House is led by Republican John Katko. Arguments against providing student loan borrowers the same bankruptcy rights as other borrowers have collapsed with the failure of programs that were said to preclude the need for student loan bankruptcy.
• She addresses demographic disparities in student loan burdens. The student loan crisis falls disproportionately on minorities and women. Warren's plan exposes this by showing the distribution of cancellation relief, a heretofore much-neglected topic. Also, by proposing that cancellation be paid for by an annual 2% wealth tax on those with net worth of over $50 million, Warren highlights the huge disparities between the few who are in the stratospheric reaches of wealth compared to millions of borrowers who are not, and knocks back arguments that her overall plan is regressive.
I must also note that Elizabeth Warren is without peer among the presidential candidates for her efforts to oversee the U.S. Department of Education more vigorously. Part of the student loan crisis is a result of ineptitude and corruption at the department. Warren is the founder of the Consumer Financial Protection Bureau.
That said, I have some differences with the Warren plan as announced last month, which suffers from two inequities, individual and institutional.
Previously, I suggested that a means-tested, refundable federal tax credit would be more equitable for all students who went to college in the high-tuition era of the last two decades. It would avoid such problems as unfairness between those in similar economic circumstances who struggled mightily to pay off their loans and those who did not; between those who chose lower priced community colleges or less selective schools and those who did not; and between those who worked to try to pay for college over many years and those who did not. The tax credit could be called the "Tuition Premium Tax Credit," the benefits of which could be used to pay off student debt, or simply used by recipients to recover economically from the high price of college, however it affected them wherever they attended. Such a tax credit would also help remedy generational inequities. The boomer generation benefitted enormously from the long, low tuition era that made paying for college relatively easy. The 2017 tax cut piled more wealth on the boomer generation; it could be trimmed back with savings applied to generational and income-class equity.
I would also limit Warren's free college plan to two-year community colleges (actually first proposed by President Harry Truman). For public four-year colleges, a return to the Carnegie Commission's funding model would strike a reasonable balance between who pays and who should pay, so as not to make the free college aspect of the Warren plan regressive, as some have alleged. The Carnegie model also recognized the importance of private, non-profit institutions, a national resource that could be threatened under Warren's plan.
As to Warren's plan to increase Pell Grants, I'd put the funds instead toward a matching program, like SEOG, that would be more efficient and draw in much-needed state and institutional effort to help students avoid excessive debt. Historically, Pell Grants have not been effective in reducing borrowing. Requiring match would also eliminate many unscrupulous for-profit institutions from federal programs, a workable alternative to Warren's plan simply to make all for-profit institutions ineligible, although that aspect of her plan is also attractive. For-profit higher education is nothing less than a national scandal and one of the primary causes of the student loan crisis.
Finally, as to Warren's wealth tax, it is a good talking point to illustrate how inequitable our society has become in terms of wealth maldistribution, but as a practical matter there is a good case to be made that an effort to relieve student loan debt for those who most need it would go a long way toward paying for itself. Getting millions of borrowers back fully into the economy makes good economic sense.
I don't have a favorite 2020 presidential candidate, but Elizabeth Warren's higher education plan is a formidable offering. The cancellation proposal is getting much favorable attention in polls, even from those without loans. Other candidates should be taking note.
Washington -- Give Elizabeth Warren credit. She is the only presidential candidate in either party who is addressing the nation's student loan crisis realistically. I have differences with the details of her approach, but that must not overshadow her leadership. Warren deserves praise for three huge policy initiatives:
• She proposes help for millions of borrowers currently in inextricable student loan trouble (often not of their own making), in a way that would also help the nation's economy. Debt relief, through a means-tested approach, needs immediate action. In 2016, candidates Bernie Sanders and Hillary Clinton wrongly neglected the distress of borrowers in favor of vague promises for future generations. Warren's loan cancellation plan for current borrowers, conversely, has now demanded even the attention of those who for years touted student loans as "good debt." The Urban Institute, for example, has begun seriously to analyze cancellation effects and has had to withdraw mistakes in its earlier papers. Economists are now looking more seriously about the positive, life-changing effects of current debt cancellation, as explained in a new paper from the National Bureau of Economic Research.
• She proposes restoration of bankruptcy protections for both federal and private student loan borrowers. Warren is a co-sponsor of Senator Dick Durbin's new restoration bill, the case for which has been spelled out well by Mark Huelsman of Demos. This is not a partisan issue; the companion bill in the House is led by Republican John Katko. Arguments against providing student loan borrowers the same bankruptcy rights as other borrowers have collapsed with the failure of programs that were said to preclude the need for student loan bankruptcy.
• She addresses demographic disparities in student loan burdens. The student loan crisis falls disproportionately on minorities and women. Warren's plan exposes this by showing the distribution of cancellation relief, a heretofore much-neglected topic. Also, by proposing that cancellation be paid for by an annual 2% wealth tax on those with net worth of over $50 million, Warren highlights the huge disparities between the few who are in the stratospheric reaches of wealth compared to millions of borrowers who are not, and knocks back arguments that her overall plan is regressive.
I must also note that Elizabeth Warren is without peer among the presidential candidates for her efforts to oversee the U.S. Department of Education more vigorously. Part of the student loan crisis is a result of ineptitude and corruption at the department. Warren is the founder of the Consumer Financial Protection Bureau.
That said, I have some differences with the Warren plan as announced last month, which suffers from two inequities, individual and institutional.
Previously, I suggested that a means-tested, refundable federal tax credit would be more equitable for all students who went to college in the high-tuition era of the last two decades. It would avoid such problems as unfairness between those in similar economic circumstances who struggled mightily to pay off their loans and those who did not; between those who chose lower priced community colleges or less selective schools and those who did not; and between those who worked to try to pay for college over many years and those who did not. The tax credit could be called the "Tuition Premium Tax Credit," the benefits of which could be used to pay off student debt, or simply used by recipients to recover economically from the high price of college, however it affected them wherever they attended. Such a tax credit would also help remedy generational inequities. The boomer generation benefitted enormously from the long, low tuition era that made paying for college relatively easy. The 2017 tax cut piled more wealth on the boomer generation; it could be trimmed back with savings applied to generational and income-class equity.
I would also limit Warren's free college plan to two-year community colleges (actually first proposed by President Harry Truman). For public four-year colleges, a return to the Carnegie Commission's funding model would strike a reasonable balance between who pays and who should pay, so as not to make the free college aspect of the Warren plan regressive, as some have alleged. The Carnegie model also recognized the importance of private, non-profit institutions, a national resource that could be threatened under Warren's plan.
As to Warren's plan to increase Pell Grants, I'd put the funds instead toward a matching program, like SEOG, that would be more efficient and draw in much-needed state and institutional effort to help students avoid excessive debt. Historically, Pell Grants have not been effective in reducing borrowing. Requiring match would also eliminate many unscrupulous for-profit institutions from federal programs, a workable alternative to Warren's plan simply to make all for-profit institutions ineligible, although that aspect of her plan is also attractive. For-profit higher education is nothing less than a national scandal and one of the primary causes of the student loan crisis.
Finally, as to Warren's wealth tax, it is a good talking point to illustrate how inequitable our society has become in terms of wealth maldistribution, but as a practical matter there is a good case to be made that an effort to relieve student loan debt for those who most need it would go a long way toward paying for itself. Getting millions of borrowers back fully into the economy makes good economic sense.
I don't have a favorite 2020 presidential candidate, but Elizabeth Warren's higher education plan is a formidable offering. The cancellation proposal is getting much favorable attention in polls, even from those without loans. Other candidates should be taking note.
Healthy Foods, Healthy Markets: Part Two
April, 2019
Lincoln -- Part One of this blog encouraged state and local elected officials to get behind a "Healthy Foods, Healthy Markets" movement, to scale up what is happening in Lincoln, Nebraska.
That means you, Nebraska Governor Rickets, and you, Nebraska Board of Regents. Nebraska agriculture is in a tailspin and needs new thinking based on what is good for healthy Nebraska minds and bodies, and good for new markets for agricultural products.
Nebraska, incredibly, imports most of its food, as do other corn-belt states. Why? Because former Secretary of Agriculture Earl Butz said "Get big or get out" and proclaimed that foreign markets for processed foods were the future.
That's now demonstrably wrong. After five decades of such policies, Nebraska rural areas are rapidly depopulating; foreign markets are in a shambles; processed foods are ruining the health of people at home and abroad. See "Planet Fat" in the New York Times.
Part Two invites national candidates for president and for Congress to get behind a "Healthy Foods, Healthy Markets" movement. In 2016, candidate Hillary Clinton had no rural policy and failed to campaign adequately in Wisconsin and Michigan, two important agricultural states. No wonder she lost. Current president Donald Trump has been a market-wrecker nonpareil. His Ag Secretary Sonny Perdue is a warmed-over Earl Butz, (presumably) without the dirty, racist jokes and the tax cheating that landed Butz in prison.
Some Democrats are focusing for 2020 on what they are against: agricultural monopolies. Elizabeth Warren summons William Jennings Bryan; Amy Klobuchar recalls the Granger Movement. They are wise to do so, if only to shame the current generation of meek farmers and ranchers who are preparing themselves to become serfs contracted to Chinese-owned corporations. Most Democrats seeking the presidency in 2020 have no identifiable rural policies at all.
What candidates for national office need is something to be for, as well as against. That's what "Healthy Foods, Healthy Markets" provides. It's hopeful, workable, scalable. It's capitalism* put to work for jobs, for health. That's what rural America needs and what candidates would do well to work into their policy platforms.
_______________________
* Many market concepts are spelled out in detail in a 2017 collection of works published by the St. Louis Federal Reserve and USDA. The authors of "Harvesting Opportunity" include agricultural policy experts, economists, businessmen, and bankers.
Lincoln -- Part One of this blog encouraged state and local elected officials to get behind a "Healthy Foods, Healthy Markets" movement, to scale up what is happening in Lincoln, Nebraska.
That means you, Nebraska Governor Rickets, and you, Nebraska Board of Regents. Nebraska agriculture is in a tailspin and needs new thinking based on what is good for healthy Nebraska minds and bodies, and good for new markets for agricultural products.
Nebraska, incredibly, imports most of its food, as do other corn-belt states. Why? Because former Secretary of Agriculture Earl Butz said "Get big or get out" and proclaimed that foreign markets for processed foods were the future.
That's now demonstrably wrong. After five decades of such policies, Nebraska rural areas are rapidly depopulating; foreign markets are in a shambles; processed foods are ruining the health of people at home and abroad. See "Planet Fat" in the New York Times.
Part Two invites national candidates for president and for Congress to get behind a "Healthy Foods, Healthy Markets" movement. In 2016, candidate Hillary Clinton had no rural policy and failed to campaign adequately in Wisconsin and Michigan, two important agricultural states. No wonder she lost. Current president Donald Trump has been a market-wrecker nonpareil. His Ag Secretary Sonny Perdue is a warmed-over Earl Butz, (presumably) without the dirty, racist jokes and the tax cheating that landed Butz in prison.
Some Democrats are focusing for 2020 on what they are against: agricultural monopolies. Elizabeth Warren summons William Jennings Bryan; Amy Klobuchar recalls the Granger Movement. They are wise to do so, if only to shame the current generation of meek farmers and ranchers who are preparing themselves to become serfs contracted to Chinese-owned corporations. Most Democrats seeking the presidency in 2020 have no identifiable rural policies at all.
What candidates for national office need is something to be for, as well as against. That's what "Healthy Foods, Healthy Markets" provides. It's hopeful, workable, scalable. It's capitalism* put to work for jobs, for health. That's what rural America needs and what candidates would do well to work into their policy platforms.
_______________________
* Many market concepts are spelled out in detail in a 2017 collection of works published by the St. Louis Federal Reserve and USDA. The authors of "Harvesting Opportunity" include agricultural policy experts, economists, businessmen, and bankers.
Healthy Foods, Healthy Markets: Part One
April, 2019
Lincoln -- Heartening news from Lincoln: the Healthy Food Access Kitchen is about to open.
Funded by the local Community Health Endowment, it will prepare nutritious food for the city's most vulnerable children and distribute it through the caterer Kinder Bites. And it will prepare healthy food for those of all ages in Lincoln's neediest neighborhoods through Lincoln Fresh, operated by the Lincoln Food Bank.
According to the Lincoln JournalStar, a local and regional healthy food marketer will soon be sharing space with the new Food Access Kitchen:
"A second business, Lone Tree Foods, will also utilize the space to wash, prep and package locally produced foods (including produce, dairy and meats) for distribution to customers such as schools, hospitals and other retail locations. This partnership will not only result in greater circulation of locally sourced produce, but also support business growth opportunities for local farmers and decrease food waste."
This is great news. Schools, hospitals, and retail locations will start getting more locally sourced produce. (Hospitals especially need it.) Nebraska farmers will have new markets for their produce, dairy, and meat. All this will stimulate market business opportunities and jobs.
Question: Could this scale up and spread to other cities? Answer: Yes, with seed money.
An appropriate source for scaling up would be within the USDA budget, at little or no additional cost to taxpayers. The current federal SNAP (food stamp) program is incredibly wasteful and counterproductive to its own mission, in that billions in SNAP dollars are spent annually by recipients on processed junk foods, especially sugared soft drinks. Ironically, SNAP is partly responsible for the nation's obesity and diabetes epidemics. Other USDA programs, like WIC, do not permit use of federal dollars for the purchase of self-destructive products, so such a limitation would bring consistency to federal policy.
The resulting SNAP savings could be moved within the USDA budget to programs that promote the development of local and regional healthy food markets.
State and local elected officials in states like Nebraska, where the rural economy badly needs new markets and where nutrition-related diseases are epidemic, should be getting behind efforts like those now being set in motion by Lincoln's Community Health Endowment. And elected officials should be demanding changes to USDA budget priorities so as to help fund a movement toward "Healthy Foods, Healthy Markets."
Lincoln -- Heartening news from Lincoln: the Healthy Food Access Kitchen is about to open.
Funded by the local Community Health Endowment, it will prepare nutritious food for the city's most vulnerable children and distribute it through the caterer Kinder Bites. And it will prepare healthy food for those of all ages in Lincoln's neediest neighborhoods through Lincoln Fresh, operated by the Lincoln Food Bank.
According to the Lincoln JournalStar, a local and regional healthy food marketer will soon be sharing space with the new Food Access Kitchen:
"A second business, Lone Tree Foods, will also utilize the space to wash, prep and package locally produced foods (including produce, dairy and meats) for distribution to customers such as schools, hospitals and other retail locations. This partnership will not only result in greater circulation of locally sourced produce, but also support business growth opportunities for local farmers and decrease food waste."
This is great news. Schools, hospitals, and retail locations will start getting more locally sourced produce. (Hospitals especially need it.) Nebraska farmers will have new markets for their produce, dairy, and meat. All this will stimulate market business opportunities and jobs.
Question: Could this scale up and spread to other cities? Answer: Yes, with seed money.
An appropriate source for scaling up would be within the USDA budget, at little or no additional cost to taxpayers. The current federal SNAP (food stamp) program is incredibly wasteful and counterproductive to its own mission, in that billions in SNAP dollars are spent annually by recipients on processed junk foods, especially sugared soft drinks. Ironically, SNAP is partly responsible for the nation's obesity and diabetes epidemics. Other USDA programs, like WIC, do not permit use of federal dollars for the purchase of self-destructive products, so such a limitation would bring consistency to federal policy.
The resulting SNAP savings could be moved within the USDA budget to programs that promote the development of local and regional healthy food markets.
State and local elected officials in states like Nebraska, where the rural economy badly needs new markets and where nutrition-related diseases are epidemic, should be getting behind efforts like those now being set in motion by Lincoln's Community Health Endowment. And elected officials should be demanding changes to USDA budget priorities so as to help fund a movement toward "Healthy Foods, Healthy Markets."
The Scandal is The Scandal
April, 2019
Washington -- It's supposedly a national scandal, how the rich and famous cheat to get their children into elite colleges. The real scandal is that we pay so much attention to it, while ignoring the plight of thousands of students and families who followed the law and have been cheated out of student benefits actually due them. The scandal is the scandal.
To be sure, the rich cheaters in the so-called Varsity Blues scandal deserve what's coming to them, including jail time if that's in store. If there's any doubt, Caitlin Flanagan, writing in The Atlantic, erases it. She is especially hard on the lawyers and high-flying investment professionals who knew the rules but violated them anyway. Heaven knows what else they do in professional life to cheat.
Meanwhile, The Chronicle of Higher Education, in a welcome departure from their usual beats, let reporters Michael Vasquez and Donald Bauman tell the under-covered stories of upwards of half a million student victims of closed colleges:
"All across the United States..., the lives of students and their families have been plunged into unexpected crisis. A Chronicle analysis of federal data shows that, in the last five years, about half a million students have been displaced by college closures, which together shuttered more than 1,200 campuses. That’s an average of 20 campus closures per month. Many of those affected are working adults living paycheck to paycheck, who carried hopes that college would be their path to the middle class.
"When a college fully goes out of business, there is no easy fix for the people caught in the crossfire. Closures can be both traumatic and financially ruinous for students — many of whom are single parents...."
Most of the colleges going out of business are for-profit schools that should never have been allowed to participate in federal programs in the first place. Millions of federal dollars intended for these students are missing. The U.S. Department of Education, staffed at the top levels by former executives of these colleges, is dragging its feet in cancelling the student-loans of their victims, although required by law to do so.
So half a million lives have been disrupted, but there's no major media scandal because no celebrities or elite schools are involved in what is prosaically called, in higher education circles, the Borrower Defense matter.
There is an equally troubling scandal in the federal Public Service Loan Forgiveness Program, under which borrowers are entitled to have the balance of their student loans cancelled after ten years of work in public service jobs. This one is at least getting a catchy headline in the New York Times:
Congress, unfortunately, is not up to holding the Department of Education's feet to the fire on either of these administrative calamities. Congressional hearings, with rare exception, have been almost genteel, focusing on what curative might be found legislatively for the upcoming reauthorization of the Higher Education Act, rather than what should be done right now to investigate corruption and racketeering at the Department of Education. There's much to investigate if there's a will to do it.
Here is a suggestion for both justice and proportionality in the Varsity Blues, Borrower Defense, and PSLF scandals. The Department of Justice should, as a condition of settlement with the rich and famous Varsity Blues perpetrators, require that they pay substantial fines to the non-profit charities representing the Borrower Defense and PSLF victims. That way, lawbreakers who tried to rig the college admission system would be aiding those who only tried to get ahead by following the rules.
That would be a satisfying measure of justice, maybe even better than jail. It would give the Varsity Blues perpetrators an opportunity for redemption as part of contrition. It would be good for the country.
This is not without precedent. For example, as part of a settlement with DOJ, Bank of America made contributions to charities in 2016 as part of a larger settlement.
Which charities would be appropriate beneficiaries of Varsity Blues fines, to help Borrower Defense, PSLF, and similar victims of higher education predators? Here's a start: National Consumer Law Center; Veterans Education Success; Project on Predatory Student Lending; Public Citizen; National Student Legal Defense Network; and the Student Borrower Protection Center.
Short of moral leadership from a Secretary of Education who could repair the damage from all three scandals – it won't happen under the current one – this might be the next best alternative.
Washington -- It's supposedly a national scandal, how the rich and famous cheat to get their children into elite colleges. The real scandal is that we pay so much attention to it, while ignoring the plight of thousands of students and families who followed the law and have been cheated out of student benefits actually due them. The scandal is the scandal.
To be sure, the rich cheaters in the so-called Varsity Blues scandal deserve what's coming to them, including jail time if that's in store. If there's any doubt, Caitlin Flanagan, writing in The Atlantic, erases it. She is especially hard on the lawyers and high-flying investment professionals who knew the rules but violated them anyway. Heaven knows what else they do in professional life to cheat.
Meanwhile, The Chronicle of Higher Education, in a welcome departure from their usual beats, let reporters Michael Vasquez and Donald Bauman tell the under-covered stories of upwards of half a million student victims of closed colleges:
"All across the United States..., the lives of students and their families have been plunged into unexpected crisis. A Chronicle analysis of federal data shows that, in the last five years, about half a million students have been displaced by college closures, which together shuttered more than 1,200 campuses. That’s an average of 20 campus closures per month. Many of those affected are working adults living paycheck to paycheck, who carried hopes that college would be their path to the middle class.
"When a college fully goes out of business, there is no easy fix for the people caught in the crossfire. Closures can be both traumatic and financially ruinous for students — many of whom are single parents...."
Most of the colleges going out of business are for-profit schools that should never have been allowed to participate in federal programs in the first place. Millions of federal dollars intended for these students are missing. The U.S. Department of Education, staffed at the top levels by former executives of these colleges, is dragging its feet in cancelling the student-loans of their victims, although required by law to do so.
So half a million lives have been disrupted, but there's no major media scandal because no celebrities or elite schools are involved in what is prosaically called, in higher education circles, the Borrower Defense matter.
There is an equally troubling scandal in the federal Public Service Loan Forgiveness Program, under which borrowers are entitled to have the balance of their student loans cancelled after ten years of work in public service jobs. This one is at least getting a catchy headline in the New York Times:
Your Student Loan Servicer Will Call You Back in a Year. Sorry.This program, with tens of thousands of victims, is foundering because the same officials at the Department of Education who are unwilling to help closed-school victims are also in no hurry to see anyone get benefits under PSLF. Credit NYT reporter Ron Lieber for staying on top of this.
Congress, unfortunately, is not up to holding the Department of Education's feet to the fire on either of these administrative calamities. Congressional hearings, with rare exception, have been almost genteel, focusing on what curative might be found legislatively for the upcoming reauthorization of the Higher Education Act, rather than what should be done right now to investigate corruption and racketeering at the Department of Education. There's much to investigate if there's a will to do it.
Here is a suggestion for both justice and proportionality in the Varsity Blues, Borrower Defense, and PSLF scandals. The Department of Justice should, as a condition of settlement with the rich and famous Varsity Blues perpetrators, require that they pay substantial fines to the non-profit charities representing the Borrower Defense and PSLF victims. That way, lawbreakers who tried to rig the college admission system would be aiding those who only tried to get ahead by following the rules.
That would be a satisfying measure of justice, maybe even better than jail. It would give the Varsity Blues perpetrators an opportunity for redemption as part of contrition. It would be good for the country.
This is not without precedent. For example, as part of a settlement with DOJ, Bank of America made contributions to charities in 2016 as part of a larger settlement.
Which charities would be appropriate beneficiaries of Varsity Blues fines, to help Borrower Defense, PSLF, and similar victims of higher education predators? Here's a start: National Consumer Law Center; Veterans Education Success; Project on Predatory Student Lending; Public Citizen; National Student Legal Defense Network; and the Student Borrower Protection Center.
Short of moral leadership from a Secretary of Education who could repair the damage from all three scandals – it won't happen under the current one – this might be the next best alternative.
Time to Re-think the NU Presidency?
April, 2019
Lincoln -- The resignation of University of Nebraska president Hank Bounds has set off discussion as to what led him to resign and speculation as to who might be next to fill the office. Bounds said he was overworked and wanted to spend more time with his family. That's a good reason.
Sometime soon, however, we should all ask whether this might be a good time for structural or job-description reforms, in view of evidence that the NU president's job is too much for any one person.
There is no doubt that the current university governance structure, which dates from the early 1970s, has had unfortunate, unintended consequences.
The University of Nebraska was once among the nation's prestigious research universities with membership in the Association of American Universities (AAU). Such membership helped attract top faculty, among other benefits. But when the Omaha-based College of Medicine was broken off from the Lincoln-based colleges, AAU eventually forced "UNL" out of the exclusive association. Other universities that kept their medical centers administratively attached to their main campuses did not suffer such a fate.
The existing NU structure also did not save UNL from getting in trouble with the American Association of University Professors (AAUP), creating yet more faculty problems. Although it was UNL Chancellor Ronnie Green who violated (according to AAUP) a graduate student's due process, NU president Hank Bounds was of little help and essentially a bystander in the controversy, which drew unwanted national headlines.
Durward "Woody" Varner, creator of the current structure and the first NU president, was the model of a strong leader who, I believe, would have either charmed or bulled his way out of both the AAU and AAUP controversies. He likely would have persuaded Wisconsin's Biddy Martin and Michigan's Mary Sue Coleman to drop their effort to remove UNL from the AAU, something then-UNL Chancellor Harvey Perlman could not do. And Woody Varner would not have been a bystander to the state legislative interference that got UNL into trouble with the AAUP. When legislative interference threatened NU in the 1970s, Varner persuaded the Board of Regents to sue to retain University independence, and he won.
But even for Woody Varner, the NU presidency may have been too demanding. He resigned unexpectedly to take a job with the NU Foundation. Which raises the question of whether the current structure expects too much of any individual.
On top of that, NU faces difficult times ahead because Nebraska's agricultural economy is failing. Hank Bounds recently put together an impressive attempt to show how the University can help the state's economy, but it has no urgent or visionary emphasis on agriculture, where it is most needed. And even his limited vision is hardly shared at the statehouse, where the executive branch is in one-party control and still looking to the farm-policy philosophy of Earl ("Get Big or Get Out") Butz* as a lodestar, which has long since lost its luster.
Rick Ruggles of the Omaha-World Herald has summarized some of the issues facing the next president. But the failing farm economy is not listed, nor is the fact that whoever the NU president is, he or she will face intense pressure from the agribusiness lobby to acquiesce in, if not outright assist in, the further monopolization and consolidation of Nebraska agriculture, which is a part of the problem.
My recommendation to the Regents is to look at the NU governance structure at least to note how it has not been a ringing success, then write a job description for the next NU president that is attuned to the times. Relieve the president of administrative duties that wore out Hank Bounds. Instruct the presidential search organization to look for a leader who can stand up for the University on the big, national reputation issues, and who has a vision to fulfill the land-grant university's mission to create a robust rural economy. That means people like Tom Vilsack and Mark Dayton, Wes Jackson and Anna Johnson, should be consulted in the search. As agriculture goes, so goes the University.
Woody Varner created an office of the presidency at Varner Hall with big shoes. The Board of Regents should try to fill them.
_________________________
*Earl Butz was U.S. Secretary of Agriculture under Presidents Nixon and Ford until he resigned over telling one too many inappropriate jokes. He later went to prison for tax-evasion. He was an agricultural economist from Purdue University who championed large agribusiness, corporate farming, and consolidation of farms.
Lincoln -- The resignation of University of Nebraska president Hank Bounds has set off discussion as to what led him to resign and speculation as to who might be next to fill the office. Bounds said he was overworked and wanted to spend more time with his family. That's a good reason.
Sometime soon, however, we should all ask whether this might be a good time for structural or job-description reforms, in view of evidence that the NU president's job is too much for any one person.
There is no doubt that the current university governance structure, which dates from the early 1970s, has had unfortunate, unintended consequences.
The University of Nebraska was once among the nation's prestigious research universities with membership in the Association of American Universities (AAU). Such membership helped attract top faculty, among other benefits. But when the Omaha-based College of Medicine was broken off from the Lincoln-based colleges, AAU eventually forced "UNL" out of the exclusive association. Other universities that kept their medical centers administratively attached to their main campuses did not suffer such a fate.
The existing NU structure also did not save UNL from getting in trouble with the American Association of University Professors (AAUP), creating yet more faculty problems. Although it was UNL Chancellor Ronnie Green who violated (according to AAUP) a graduate student's due process, NU president Hank Bounds was of little help and essentially a bystander in the controversy, which drew unwanted national headlines.
Durward "Woody" Varner, creator of the current structure and the first NU president, was the model of a strong leader who, I believe, would have either charmed or bulled his way out of both the AAU and AAUP controversies. He likely would have persuaded Wisconsin's Biddy Martin and Michigan's Mary Sue Coleman to drop their effort to remove UNL from the AAU, something then-UNL Chancellor Harvey Perlman could not do. And Woody Varner would not have been a bystander to the state legislative interference that got UNL into trouble with the AAUP. When legislative interference threatened NU in the 1970s, Varner persuaded the Board of Regents to sue to retain University independence, and he won.
But even for Woody Varner, the NU presidency may have been too demanding. He resigned unexpectedly to take a job with the NU Foundation. Which raises the question of whether the current structure expects too much of any individual.
On top of that, NU faces difficult times ahead because Nebraska's agricultural economy is failing. Hank Bounds recently put together an impressive attempt to show how the University can help the state's economy, but it has no urgent or visionary emphasis on agriculture, where it is most needed. And even his limited vision is hardly shared at the statehouse, where the executive branch is in one-party control and still looking to the farm-policy philosophy of Earl ("Get Big or Get Out") Butz* as a lodestar, which has long since lost its luster.
Rick Ruggles of the Omaha-World Herald has summarized some of the issues facing the next president. But the failing farm economy is not listed, nor is the fact that whoever the NU president is, he or she will face intense pressure from the agribusiness lobby to acquiesce in, if not outright assist in, the further monopolization and consolidation of Nebraska agriculture, which is a part of the problem.
My recommendation to the Regents is to look at the NU governance structure at least to note how it has not been a ringing success, then write a job description for the next NU president that is attuned to the times. Relieve the president of administrative duties that wore out Hank Bounds. Instruct the presidential search organization to look for a leader who can stand up for the University on the big, national reputation issues, and who has a vision to fulfill the land-grant university's mission to create a robust rural economy. That means people like Tom Vilsack and Mark Dayton, Wes Jackson and Anna Johnson, should be consulted in the search. As agriculture goes, so goes the University.
Woody Varner created an office of the presidency at Varner Hall with big shoes. The Board of Regents should try to fill them.
_________________________
*Earl Butz was U.S. Secretary of Agriculture under Presidents Nixon and Ford until he resigned over telling one too many inappropriate jokes. He later went to prison for tax-evasion. He was an agricultural economist from Purdue University who championed large agribusiness, corporate farming, and consolidation of farms.
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