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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?

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The NCLB Blog was established by the AFT as a forum where public education advocates, policymakers and others can exchange information and express their opinions on NCLB and related issues. The views expressed here are not the official views of the AFT or any of its affiliates. All claims otherwise would violate the spirit and purpose of the blog. © American Federation of Teachers, AFL-CIO. All rights reserved. Photographs and illustrations cannot be used without permission of the AFT.