Dept. of Ed's "Confusion" + Lenders' Greed = $600 MIllion Wasted
October 22, 2007 11:10 AM
Is anyone going to be surprised, six months from now, if a news report finds that the U.S. Department of Education (ED) did nothing while student lenders took $1 billion in tax money? The student loan scandal, long on the back burner, may be boiling over again.
In January, the figure was $278 million, and the rationale for ED's inaction was that recovering the money would set a "precendent [that] might require it to pursue other loan companies, too, possibly driving smaller ones out of business and reducing borrowing options." (Never mind that those smaller companies had received subsidies ED's inspector general has labeled "improper.")
By April, the student loan scandal had cost one ED official and several college officials their jobs.
In May, ED created finally took serious action...by creating a task force.
And now, according to Amit Paley, writing in this weekend's Washington Post, the figure is up to $600 million, and Education Secretary Margaret Spellings acknowledges "the federal government 'had some responsibility' for 'confusion' over subsidy rules."
Is it naive to argue that the federal government also has "some responsibility" to try to get back $600 million of taxpayers' money?


