Profit in Education Is Bad—Unless You Are the Department of Education

Contact: John White    Office: 480.222.4314    Mobile: 480.433.2392


How far will the DOE go to remain one of the top five most profitable organizations in the United States?
September 19, 2016—Phoenix, AZ

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?

Congressional witness, non-federal negotiator and witness for the U.S. Department of Education (DOE), and education advocate Mary Lyn Hammer has blown the whistle on the U.S. Department of Education.  In Injustice for All, Hammer’s 312-page indexed report, she has published the details of consistent patterns of data manipulation, misreporting, and the DOE’s attack on for-profit educators—a plan that has successfully drawn attention away from the DOE’s astounding federal student loan profits and failed program oversight. With 96 data and image tables, Hammer offers her well-documented and independently verified evidence that indicates forces within the federal government are seeking to confuse United States taxpayers and drive an agenda that threatens to annihilate American education ideals.

Career College Central applauded Ms. Hammer’s bravery in approaching this subject: “For any career college sector executive out there who has wondered if someone could ever be strong enough to call out the Department of Education for misrepresenting data…Hammer brings all that and more to the forefront here.”

Hammer claims that such misreporting and data manipulation is intended to sway public opinion about sector-level performance in higher education and to hide the truth about the DOE’s own failures. These are not the first data failures from the DOE and the Chronicle of Higher Education writes: “If the department [DOE] has bungled its default data, this would not be the first time. In 2010 a programming error led the department to undercount defaults for seven months; a year later the department admitted to errors that inflated default rates across all sectors.”

The DOE data and reporting manipulation Hammer uncovered includes:

  • Consistent inaccuracies in DOE reports on sector-level performance for cohort default rates (CDRs) have falsely improved public sector performance and falsely harmed proprietary (for-profit) sector performance
  • DOE’s mismanagement of loan servicing led to approximately 403,000* students being incorrectly placed in default status and the DOE has chosen not to rectify this atrocity
  • To cover up the DOE’s loan servicing mismanagement, it exceeded its authority by “adjusting” CDRs that are specifically defined in law, and the DOE did so without Congressional approval
  • The DOE’s “adjusted” CDRs were not consistently applied to all schools unless it served the DOE’s greater agenda
  • FY 2011 Gainful Employment (GE) rates released to the public used grossly inflated information which resulted in a misperception that proprietary schools leave students with high debt and unaffordable loan payments
  • After Hammer testified at a DOE hearing about the inaccuracies of the FY 2011 GE calculations, the DOE did not include all relevant data in the publicly released FY 2012 GE Rate data, therefore the information was not auditable
  • The FY 2011 and FY 2012 GE data were missing thousands of programs and excluded large percentages of the public and private programs thereby leaving lawmakers and the public unable to make informed decisions about educational choices
  • Public opinion about sector-level performance is largely based upon DOE press releases and rhetoric because its publicly available data and reports are limited to what it wants the public to see and believe

The Obama Administration has claimed that eliminating private sector student loans and replacing them with federal direct student loans would reduce costs for students; however, this takeover has actually increased costs for many students with payments so low that the interest accruing is greater than the minimum payment required. These new regulations can strangle students’ financial future. Hammer said: “The scheme to provide ‘affordable’ student loan payments that span over 20–30 years means today’s students face a lifetime of servitude—not to educators but to the federal government who is raking in profits in additional interest collected on these federal student loans.” 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?

A few of many important questions asked by Mary Lyn Hammer:

  • Why is the DOE under the guidance of the Obama Administration attacking the existence of proprietary schools when the proprietary school average graduation rate is actually the highest of all sectors in the country at over 60% based on the DOE’s own databases?
  • Why did the DOE move forward with a vengeance to execute GE 2.0, the second more aggressive gainful employment rules, when Hammer had provided prior oral and written testimony that had proved, when using the correct annual payments in the debt-to-earnings rate calculation, the proprietary sector actually only had 6 failing programs (out of 7,847 programs) based on the DOE’s own GE “final” FY 2011 data?
  • Why would the DOE reintroduce the lower thresholds in the GE 2.0 “zone” definition when it had eliminated those same thresholds and extensively justified higher thresholds in the original GE Preamble and final rules? Why did the DOE change its mind about all of its original threshold justifications?
  • Is it possible that with the elimination of private-sector student loans and replacement by federal direct loans that the federal government has taken on “loan shark” qualities detrimental to the health and well-being of our entire nation?

For more information, to obtain a review copy, schedule an interview, and/or to book Ms. Hammer to speak to your group, please contact John White at or by phone at 480.222.4314. To order the report in printed or ebook format, go to

*After publication of Injustice for All, the estimate of 403,000 affected borrowers was updated based on methodology agreed upon in Congressional meetings.

Suggested Questions for Interviewers

Mary Lyn Hammer is exceptionally prepared to answer tough questions. Suggestions include:

  1. Does the DOE have a monopoly on student loans? Are student loans becoming long-term servitude to the government?
  2. Who is the largest consumer financial (money-lending) institution in the country?
  3. How much will the government actually earn off of the interest on student loans? Do the profits from student loan earnings go back into education?
  4. Were the DOE’s Pay-As-You-Earn (PAYE) and REPAYE programs purposely designed to calculate the majority of initial payments to be interest payments—which is profits to the government?
  5. Have the minimal payment requirements for PAYE and REPAY been used to adversely affect “repayment rates” for GE programs attended by low-income students primarily attending for-profit schools?
  6. Why do you compare the government’s management of loan programs to the tactics used by loan sharks?
  7. The IRS granted nonprofit status to the Center for Excellence in Higher Education prior to any GE or other anti-proprietary-sector regulations, right? How can the DOE choose to deny this IRS-approved tax status filing 44 months later? What does the DOE gain by denying this status?
  8. What do you believe will happen if students are given free education only at community colleges? What impact will occur if proprietary schools are eliminated?
  9. I understand you and many others suspect that the University of Phoenix/Apollo Education Group was intentionally targeted to devalue its stock prices for the eventual purchase by people with close ties to the Obama Administration. Please explain your suspicions.
  10. You have reported that the DOE damaged the financial standing of several hundred thousand student borrowers. What evidence do you have? Whom have you shared the evidence with? Why hasn’t the DOE corrected its mistake for students hurt by the defaults included in the CDR adjustments?
  11. Why did the DOE only adjust CDRs for certain schools in jeopardy of losing federal funding and not all schools?
  12. How has the DOE covered up its own poor performance and mismanagement of student loans? Why wouldn’t DOE reports match its own data?
  13. What could the motivation be to only adjust the default rate information for nonprofit schools?
  14. What does the DOE manipulation of CDR rates mean for higher education? How does it appear that the DOE is manipulating gainful employment rates?
  15. What problems existed with the original College Scorecard hosted on How does the College Navigator, hosted by the DOE, lack transparency?
  16. Why did you feel it was important to have your own report audited for accuracy?
  17. You write about accountability for students, the government, and schools. What suggestions do you have for a system overhaul or for corrections?
Read Mary Lyn Hammer’s Bio