Roundup: Week of November 26 – November 30

Nelnet Audit Receives Top Prize from the Council on Integrity and Efficiency

The Inspector General’s Office at the Department of Education has received the top award the government gives to federal inspector generals for its investigation into the student loan company Nelnet’s efforts to overbill the U.S. Treasury hundreds of millions of dollars. The President’s Council on Integrity and Efficiency presents the Alexander Hamilton Award to an Inspector General team each year for “outstanding achievements in improving the integrity, efficiency, and effectiveness of Executive Branch agency operations.” The investigation by the Education Department’s Inspector General revealed that Nelnet had received $278 million in improper 9.5 percent subsidy payments. In its audit report, the Inspector General called on Education Secretary Margaret Spellings to require the loan company to return the overpayments. Spellings, however, dismissed the recommendationthe result of the Inspector Generals “outstanding” workand forgave the overpayments.

At a recent presidential campaign event in Iowa, Sen. Hillary Clinton (D-NY) took aim at the student loan industry, accusing banks and other lenders of ripping off students with high interest rates and burdensome repayment demands. According to a report in The New York Times, Clinton reiterated her campaign pledge to eliminate the Federal Family Education Loan program, saying she wants “to get rid of the student loan companies.” She made her comments in a response to a question she received about rising tuition costs. Speaking of her own college experience, she said, “I kept working and I got a little scholarship, and I borrowed money form the government at 2% interest.” Now, she said, “I’m asking myself, why are we making it so expensive and costly for families today?”

$2.3 Million Lobbying Bill for Sallie Mae

Sallie Mae spent $2.3 million in the first half of 2007 to lobby Congress, the White House, the Education Department, and the Government Accountability Office, according to a disclosure form filed with the Senates public records office. Sallie Mae is required to report any lobbying activities to Congress under the Lobbying Disclosure Act of 1995. Despite Sallie Mae’s best efforts, the Democratic-led Congress approved legislation in September cutting over $20 billion in lender subsidies, and President Bush signed the bill into law.

Growing Concentration of Minority Students at Minority-Serving Institutions

The proportion of undergraduate minority students enrolled in minority-serving institutions is on the rise, according to a new report from the National Center for Education Statistics. In 1984, minority-serving institutions accounted for 38 percent of undergraduate minority enrollment, while in 2004 the proportion had jumped to 58 percent. The number of minority-serving institutions has also grown dramatically, from 414, or 14 percent of all colleges in 1984, to 1,254, or 32 percent of all colleges in 2004and for-profit schools were responsible for much of that expansion. The growing concentration of minority students is most evident at “black-serving” non-historically black colleges and universities, at which black students comprise at least 25 percent of the undergraduate population.