It's time to ask: When the Department of Education refuses to enforce its own laws, who pays the price? Right now, the answer is simple: hundreds of thousands of students around the country. It's time for that to change--but it won't if Secretary Duncan keeps blaming Congress for his own Department's failures.
According to Secretary Duncan's recent Politico editorial, Corinthian Colleges, once a mighty for-profit college empire using taxpayer money to prey on poor students just looking to get ahead, ran smack up against his heroic Department, which shut it down and put together a plan for defrauded students to get their money back. His staff would be able to do more, Secretary Duncan gripes, if only the Higher Education Act contained more robust enforcement mechanisms. Then it could shut down scam schools like Corinthian and force them to pay for the wrongs they committed against their students.
Two parts of this story are true: Corinthian and other institutions like it are preying on the dreams of those disenfranchised by the rest of our higher education system, and many members of Congress are all to happy to take for-profits' money to advocate for their interests. The rest is self-serving bunkum.
Until February of this year, when 15 former Corinthian students publicly refused to pay their student loans and, along with others, began submitting applications for debt relief, the Department had not given the least thought to how to provide them "every dime of relief". The Department itself admitted that it was a "building debt activism movement", which, in full disclosure, I was involved in organizing, created "a need for a clearer process for potential claimants."
Before students forced themselves into the conversation, the Department had been working to stuff Corinthian's wrongdoing under the rug: refusing to prosecute several whistleblower suits and arranging a sale of as many campuses as possible to the debt buyer Education Credit Management Corporation (ECMC), complete with a provision absolving ECMC of any liability for Corinthian's behavior. Meanwhile, its fellow regulators, including the Consumer Financial Protection Bureau, the Securities Exchange Commission, the Department of Justice, and multiple states' attorneys general were busy investigating and suing Corinthian. Their powers were restricted to private student loans, but they did everything they could to convince an unbudging Department to do its part. Several Congresspeople -- including those Secretary Duncan praises in his editorial -- attempted to do the same.
What everybody paying attention knows (apart from the Department of Education itself) is that the laws on the books already provide Secretary Duncan and his staff all of the legal authority they need to hold Corinthian and its ilk accountable. They just refuse to use it.
Secretary Duncan could immediately cancel all former Corinthian students' federal student loan debts. He already has the legal arguments in front of him. We even sent him an order that he would just have to sign to make legally effective.
In fact, he or his predecessors could have erased students' debts years ago--damning evidence of systemic misrepresentations at Corinthian has been available at least since 2007. If he (or his predecessor) had done so before their series of inept half-measures that led to the leaching of the corporation's funds, the Department could have recouped every dime from Corinthian. Yes, under today's laws. Under yesterday's laws. Under laws that have been on the books for decades.
As for the debt relief process the Department is currently cooking up (at a slow boil) for students beyond Corinthian, all indications are that it will not even approach making every dime of relief available to which the law entitles them. Without needing even the least Congressional action, the Department could set up a procedure whereby a neutral investigator, working with other law enforcement officials, seeks out wrongdoing at colleges, provides automatic relief to all students who attended violating colleges, and compels those colleges to compensate the Department for every dime of relief granted. I repeat: all of this under today's laws.
Instead, Secretary Duncan intends to force defrauded students to perform their own investigations, make their own legal arguments, and submit supporting documents they will never have because their colleges refuse to turn them over. Even where the Department has expressly found systemic wrongdoing, it is requiring students to apply for relief one by one, without even notifying them of their eligibility. Here's hoping those students happen to chance upon and decipher the Department of Education's byzantine website!
The list of the Secretary's misrepresentations goes on and on. Bottom line: the Department of Education has plenty of tools in its toolkit already. It could force predatory schools to pay up and it could shut them down without any help from Congress. It could have done so, frankly, without even having had to spend the time and money to litigate gainful employment regulations up and down the federal courts.
It's time for the Department to stop these scams -- not to sabotage its own accountability by blaming Congress.