On Wednesday Iexpressed my hope that homophobic bigot would become embroiled in the burgeoning federal student loan scandal. 

Today I awake to find that I’m close to getting my wish.

With scandal rattling the $85 billion student loan industry, Education Secretary Margaret Spellings argued at a House hearing on Thursday that she lacked legal authority to clamp down on many abuses.

Ms. Spellings faced pointed questioning at the hearing from Congressional Democrats, who accused her department of mismanagement and complacency.


Several Democrats, led by Representative George Miller, questioned her aggressively, asserting that she had regulatory power and moral influence that she had neglected to wield to stop loan companies from paying universities or giving gifts, trips, stock and consulting payments to the university financial aid officers who guide students toward loans.

Mr. Miller, the California Democrat who heads the education committee, also took up a separate issue of questionable federal subsidy payments to lenders.He particularly criticized Ms. Spellings’s decision to ignore a recommendation of the department’s inspector general that she recover $278 million in federal subsidy payments improperly obtained by Nelnet, a lender based in Nebraska. He also said the Justice Department was now reviewing the inspector general’s September audit that found Nelnet ineligible for those payments.

After the hearing, a Justice Department spokesman, Charles Miller, did not contradict Representative Miller’s assertions, but said, “We have no comment at this time.”[emphasis added]

Mr. Miller openly dismissed Ms. Spellings’s portrayal of her department’s monitoring of student lending as robust. He also criticized the department for its oversight of Reading First, a program designed to teach poor children to read that has been besieged by reports of conflicts of interest among Education Department consultants.

“When I look at the whole body of evidence that has been amassed about both the student loan and Reading First programs, it is clear that — at a minimum — the Education Department’s oversight failures have been monumental,” he said.

“We monitor these programs vigorously,” Ms. Spellings replied.

“Who is monitoring?” Mr. Miller shot back. “Do they have blinders on?”


The department has also come under scrutiny from Congress for its failure to halt millions of dollars in subsidy payments to lenders that exploited loopholes to inflate their eligibility for subsidies on the student loans, including those paid to Nelnet.

Mr. Miller and other lawmakers pressed Ms. Spellings, the lone witness, to explain her decision in January to allow Nelnet, a major contributor to Republican campaigns, to keep the $278 million. In exchange, Nelnet agreed not to bill for nearly $900 million in subsidies it believed it was eligible for.

Ms. Spellings said that she thought the fact that the department had been paying the subsidies without question could have put it in legal jeopardy and that Nelnet might have prevailed in a lawsuit.


Representative John F. Tierney, Democrat of Massachusetts, said, “It boggles my mind — we allowed somebody to get away essentially with theft.” [emphasis added]

3 thoughts on “Mis-Spellings

  1. Well, either I have an exceptionally strong mind, or John Tierney has an exceptionally bogglable one (and since “bogglable” probably isn’t a word at all, I doubt it’s the former), because nothing about this surprises me at all.
    Finally, FINALLY, someone’s asking questions. Thank you, George Miller.
    I’ve said for awhile now that to understand this Administration you have to put aside notions of politics, or even policies, and focus on qui bono, on a P&L sheet. Then it makes sense. These folks are all about rape and pillage; that other stuff, if it’s actually even talked about at all, is what passes for their cover story.
    With kind regards,
    Dog, etc.
    searching for home

  2. I’m looking for a connection – maybe you know of one. Here in Missouri, a big political brouhaha has been the governor and associated Republicans (imagine a room of Shrub Clones) has been ramrod-ing through a plan to sell off some of the Missouri higher ed loans (MOHELA) and use the money to pay for “improvements” to the colleges. (It has just come to light that one of these improvements listed is to establish a program for teaching homeland security).
    Knowing the problems in the national news with student loans, knowing how vociferously the governor has fought for this program, and knowing that the Missouri repubs are connected by IV lines to the Washington neocons, I’m ready to put on a tinfoil hat.
    Do you know of a connection?

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