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read an expert perspective on important issues in higher education reporting metrics and legislation


Senator Mike Enzi (R-WY), Chairman of the U.S. Senate Committee on the Budget, has recommended that Secretary of Education, Betsy DeVos, “…conduct a comprehensive audit of all student loan-related data maintained by the Department—whether used for budgetary, regulatory, public information or other purposes—and take steps to ensure the integrity of the data going forward…” This comes after the U.S. Department of Education (ED) admitted in January 2017, it published inaccurate information about repayment rates on its College Scorecard website. Although ED has downplayed the impact of the coding errors, this pattern of inaccurate reporting and mismanaged data is not new—it is the tip of the iceberg.

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Accurate facts based on ED’s own data show a very different reality from what the public has been led to believe about for-profit schools. It’s time to make changes before we reach a crisis-level with students on the street because there are no available schools.

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Accurate facts based on ED’s own data show a very different reality from what the public has been led to believe about for-profit schools. It’s time to make changes before we reach a crisis-level with students on the street because there are no available schools.

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The Consumer Financial Protection Bureau FINALLY issued a report that supports what Ms. Mary Lyn Hammer, a student advocate, has been telling officials, policy makers and the U.S. Department of Education for years—that federal student loan servicers are engaging in practices that harm students and increase profits for the federal government through the ED Department as well as lenders and servicers through misapplied student loan payments.

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How far will the DOE go to remain one of the top five most profitable organizations in the United States? In 2013 the federal government student loan profit was $41.3 billion. Many Americans do not understand that this profit goes into the federal treasury, not back into education. Is it any surprise that the profit numbers have not been publicly disclosed since the 2013 profit that made the DOE the third most profitable business in the United States only surpassed by Apple and Exxon Mobile?

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In 2011, servicing of certain Federal Family Student Loan Program (FFELP) loans was transferred from the private sector to the U.S. Government as part of the “transition to 100% direct student loan lending” and something went terribly wrong—nearly 403,000 student borrowers were MISTAKENLY placed in default status.


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2016 Negotiated Rulemaking
Mary Lyn Hammer’s Comments on Negotiated Rulemaking for Higher Education 

U.S. DEPARTMENT OF EDUCATION

ATTN:  Jean-Didier Gaina
400 Maryland Ave., SW, Room 6W232B,
Washington, DC 20202

RE:  Docket ID ED-2015-OPE-0103

Dear Ms. Gaina,

I write to you as a concerned American taxpayer who has watched the systematic assault on proprietary schools over the last seven years. I and many others see as this assault as planned.  I welcome the opportunity to comment on the above referenced proposed federal regulations for “defense to repayment.”

To begin, please review the original roles and purposes of the Department and compare that intent to what it has become today. A stark difference has emerged that does not appear to be serving or supporting the original intent of the U.S. Department of Education (“Department” or “ED”) defined in its MISSION as follows:

ED’s mission is to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access.

Congress established the U.S. Department of Education (ED) on May 4, 1980, in the Department of Education Organization Act (Public Law 96-88 of October 1979). [1] Under this law, ED’s mission is to:

  • Strengthen the Federal commitment to assuring access to equal educational opportunity for every individual;
  • Supplement and complement the efforts of states, the local school systems and other instrumentalities of the states, the private sector, public and private nonprofit educational research institutions, community-based organizations, parents, and students to improve the quality of education;
  • Encourage the increased involvement of the public, parents, and students in Federal education programs;
  • Promote improvements in the quality and usefulness of education through Federally supported research, evaluation, and sharing of information;
  • Improve the coordination of Federal education programs;
  • Improve the management of Federal education activities; and
  • Increase the accountability of Federal education programs to the President, the Congress, and the public.

I am alarmed by the Department’s departure from its mission which is blatantly evident in this proposed rule.  Nowhere in the Department’s mission is any definition that could remotely be construed as authoritarian where the Department has been awarded the discretion to choose cases to bring forward (federal attorney), then decide who the hearing officer is (choose their own judge), then argue the cases (prosecutor) in front of their hearing officer of choice, and then decide the punishment (jury). Not only are the contents of this proposed rule a departure from the Department’s defined mission, it is also an alarming departure from the legal structure in America that assumes innocence until proven guilty; ensures that the accused is allowed to have a hearing in front of an unbiased selection of peers; and ensures that the terms and provisions of the Constitution are upheld.

Under these proposed rules, which also appear to be aimed primarily at proprietary schools, the following is evident:

  1. The Department has made itself the single authority for reviewing, organizing and bringing forth claims against schools giving itself broad discretion and complete control over every aspect of these cases. This includes organizing “classes” of litigants to bring claims even if those students themselves have not made a claim against the school. The students can be put into litigation classes without their knowledge or approval and the Department can use a students’ personal information in the claim without their knowledge or consent.
  2. The Department has redefined the meaning of “fraud”. Fraud is traditionally defined as “A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.”
    “Fraud must be proved by showing that the defendant’s actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.” [2] In these rules, the Department does not require “injury” or “damage” as a mandatory component of the claims.  A student could have graduated, be working in the field of study, and earn within range of the earnings disclosed by the school yet still be allowed to file a claim or be included by the Department in a “class” of litigants for discharge of his or her student loan debt without his or her knowledge or consent.
  1. Schools have little if any options for appealing or offsetting the costs of frivolous claims, which are definitely expected to be filed. Schools have no way of reversing the damage to their reputations resulting from the “presumed guilty” nature of these regulations—once the schools have endured negative publicity from a frivolous claim, the damage has been done.
  2. The proposed regulations subject schools to “double jeopardy” which is strictly prohibited by the Constitutionbecause individuals who lose a claim under a “class” have been given the right to file another claim as an individual, thus giving them two chances to file claims.

The egregious departure from the Department’s mission has also been identified by elected officials and media outlets alike.

(cont.)

Continue reading Ms. Hammer’s Comments

While the U.S. Department of Education is holding negotiated rulemaking for loan discharges with a continued assault on proprietary schools, it has done nothing to help those students wrongly defaulted by its own doing.

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A Chicago-based equity firm that includes Obama’s best friend, Marty Nesbitt, and former Obama political appointee, Tony Miller, who was the Deputy Secretary and Chief Operating Officer for the Department of Education from 2009 to 2013 is a primary investor in the purchase of Apollo Education Group (University of Phoenix).

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