Ahead of Miguel Cardona’s first congressional hearing as Secretary of the Department of Education (ED), a pair of Republican House leaders are alleging the department is burying a report showing decades of federal miscalculations in student loans program profits.
In a letter spearheaded by Reps. Virginia Foxx (R-N.C.) and Mike Bost (R-Ill), ranking members of the House Education and Labor and Veterans Affairs committees, the members seek answers to a reported “hundreds of billions of dollars wide gap between what the executive branch says student loans are worth and the real value of those loans.”
The allegation stems from a recent article published in The Wall Street Journal that cites a report requested by former ED Secretary Betsey DeVos that found over the course of three decades, Congress, various administrations, and federal watchdogs had “systematically made the student loan program look profitable when in fact defaults were becoming more likely.”
Foxx and Bost call on Cardona to release the report cited in the article by May 5.
“The public policy implications of such a discrepancy are enormous. Federal student loans provide access to college for many Americans,” Foxx and Bost write. “Taxpayers deserve to know if their investment has a junk rating. Students’ ability to pursue a college degree is threatened if the federal government is no longer able to offer them loans.”
A number of OMB staffers were also cited in the article and expressed concern over the accuracy of analysis coming from private-sector officials who do not have experience with the federal budgeting process.
Cardona is scheduled to testify before the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies on Wednesday, May 5.
Meanwhile, ED is expected to soon release a memo concerning what — if any — authority the executive branch has to cancel student loans.
Publication Date: 5/3/2021