Accountability for All…Except the Department of Education

The Department of Education loves to talk the talk about accountability. But when it comes to walking the walk, its failingand pretty spectacularly.

Case #1

Front and center is the Departments handling of a student loan subsidy payment scandal. In an interview with the Washington Post published this weekend, Secretary of Education Margaret Spellings admitted that the Department of Education is accountable for overpaying student lenders hundreds of millions of dollars in improper 9.5 percent loan subsidy payments. Spellings has said she’s not going to try to collect the overpayments.

“The department, I believe, had some responsibility with respect to [the overpayments],” Spellings told the Post. After years of the Department sitting by while student lenders improperly raked in hundreds of millions of dollars in taxpayer money, shes finally admitted fault in the Department of Education. Something went wrong, someone screwed up. So what’s she going to do about it? Absolutely nothing.

Spellings isnt going to conduct audits to account for the full cost of 9.5 percent loan overpayments. So, the Washington Post went ahead and calculated its own estimate after submitting a Freedom of Information Act request to the Department for the subsidy payment data. The Post’s analysis found that the improper payments totaled more than $600 million$278 million to Nelnet already identified by the Education Department’s Inspector General, and another $330 million to 10 other lenders. Of course the Department called the Posts analysis “flawed,” but insists it wont try its own hand at an estimate. “I dont know if its a knowable number,” Spellings maintains.

So student loan banks get off scot-free with something in the range of $600 million in government funds, because your Department of Education isnt going to pursue any type of taxpayer reimbursement. Spellings argues that she shouldnt go after the lenders because the Department has a “legal risk,” since it holds some responsibility for not issuing stricter federal guidance on the improper payment schemes. Strikes us that’s an assessment for the Department of Justice to make. But even if Spellings is right, shouldnt someone at the Department of Education be held accountable for the agency’s gross negligence? No one has been.

Although Terri Shaw, the Chief Operating Officer of the Federal Student Aid office during the time that the student loan banks were aggressively growing their 9.5 percent loan volume, was given $250,000 in bonuses from 2003 to 2006, almost $65,000 a year. That should teach her.

Case #2

Anyone remember Matteo Fontana? He was at the center of a Higher Ed Watch investigation into the improper relationships between student loan companies and the Department. We discovered that Fontana held 10,500 shares of insider stock in a student loan company, worth at least $100,000, while he was in charge of overseeing lenders and guarantee agencies that participate in the Federal Family Education Loan Program.

In the wake of our investigation, conflicts of interest were uncovered throughout the student loan industry. And implicated universities and student loan companies cleaned up their own backyards. At least seven financial aid officers and three student loan officials were quickly fired from or forced out of their jobs. But seven months later, Fontana is still employed by the Department. He remains on paid administrative leave pending completion of an Inspector General review, according to the Department.

It’s certainly possible that the Department of Education is using Fontana as a fall guy for their negligence in establishing or enforcing conflict of interest standards. But theres no sign of any type of accountability in the offing for anyoneFontana, his higher-ups, or the people in the ethics office who were in charge of reviewing his financial disclosure forms.

Case #3

The Departments lax stance on accountability isnt confined to higher education. Just look at the fallout from the Armstrong Williams controversy. Williams, a conservative columnist and TV personality, signed a secret $240,000 contract with the Department of Education in 2003 to promote the No Child Left Behind Act, which the New America Foundation supports. After the contract was revealed in 2005, critics in Congress went after the Department for illegally sponsoring propaganda with taxpayer money. Tribune Media Services terminated its syndication agreement with Williams. And just last week, the Federal Communications Corporation proposed $76,000 in fines against two broadcast companies for not informing viewers of Williams sponsorship.

Then theres the Department of Education. After first arguing that the contract was a “permissible use of taxpayer funds under legal government contracting procedures” (has the ring of VP Al Gore’s “controlling legal authority”), the Department sat back and tried to ride out the controversy. Even after the Government Accountability Office ruled that the contract “violated the publicity or propaganda prohibition” in federal law because it “amounted to covert propaganda,” there was no Department response. To date, no one currently or formerly with the Department of Education has been held accountable for the Armstrong Williams fiasco.

The Spillover

By the end of this month, Senator Edward Kennedy (D-MA) is set to release the Senate Education Committees reauthorization draft of the No Child Left Behind Act. Congressman George Miller (D-CA) already has reaffirmed his support of the basic accountability tenets of the law in the House Committees draft. And a majority of members of the Congressional education committees from both political parties remain committed to holding schools and teachers responsible for student performance.

But as these members of Congress fight those who don’t believe in the concept of accountability in education policy, they’re shackled by the presence of a Department of Education that seems to believe in accountability for everyone but itself. If accountability is going to be a guiding philosophy of K-12 and higher education policyand it should bethen the Department of Education needs to take the concept seriously and clean up its own house.

Secretary Spellings, you’re no shrinking violet. Walk the walk.