TRANSPARENCY ALERT!! Department of Education Shuns Transparency in Favor of New Unnecessary Regulation

A critical element in bringing back fiscal responsibility and government accountability is transparency.  When President Obama took office in 2009 he pledged to have “an unprecedented level of openness in Government.”   That is why the Taxpayers Protection Alliance was so dismayed when it found out that the Department of Education (DOEd) may be side-stepping transparency in its recent regulatory actions on gainful employment rules.

DOEd  proposed  “gainful employment” rules which require for-profit schools to prove their graduates are either paying back loans or are capable of doing so.  If not, the schools will lose access to federal student aid.  The process has been a mess, to say the least.  DOEd was supposed to release the regulations in September 2010 but delayed the release because of an overwhelming number of petitions that were opposed to the regulation.

What ensued was more reminiscent of the Keystone Kops rather than the proper way a rule should be implemented or a federal bureaucracy should act.

Timeline:

August 4, 2010:   The Government Accountability Office prepared a report for the Senate Health, Education, Labor and Pensions Committee at the request of Sen. Tom Harkin (D-Iowa).   The report criticized for profit colleges and universities recruiting practices based on the evidence of 28 key investigative “scenarios.”

September, 2010:  DOEd delays implementation of new rule

November 17, 2010:  Senators Richard Burr (R-N.C.) and Tom Coburn (R-Okla.) sent a letter to DOEd inspector general Kathleen Tighe that said that publicly available documents show that the department may have leaked the proposed “gainful employment” rules to short sellers and others who support the department’s position.  (See the National Law and Policy Center’s blog post about the short seller issue.)

November 18, 2010:  Former special counsel to President Clinton Lanny Davis points out in a Huffington Post article that DOEd is targeting only for-profit career colleges.

November 30, 2010:  GAO released revisions to its August report. (see revisions here)

December 23, 2010:  The Examiner ran a story that stated, “Recent revisions to a Government Accountability Office report on for-profit colleges have raised questions about the GAO’s objectivity and credibility. Now, a bipartisan group of six members of Congress has asked that those questions be answered.”  And, “The GAO report of Aug. 4 was prepared for the Senate Health, Education, Labor and Pensions Committee at the request of Sen. Tom Harkin (D-Iowa). It criticized the recruiting practices of for-profit colleges and universities based on the evidence of 28 key investigative ‘scenarios.’  The revisions, released Nov. 30, made factual changes to 16 of the 28.”

February, 2011:  A bipartisan grouping of house members offered an amendment to stop Gainful Employment in its tracks.

March 1, 2011:  Citizens for Responsibility and Ethics in Washington (CREW) also weighed in on the issue with a press release: “Citizens for Responsibility and Ethics in Washington (CREW) sent letters to the Director of Enforcement for the Securities and Exchange Commission (SEC) and U.S. Department of Education Secretary Arne Duncan to share records CREW obtained through its Freedom of Information Act (FOIA) lawsuit against Education.  These documents show high-level Education officials colluded with Wall Street short-sellers, improperly leaking the contents of highly controversial gainful employment regulations in advance of their publication.”

May 3, 2011:  The Toronto Star reports that DOEd sent its proposed gainful employment regulations to the Office of Management and Budget.

With an expected decision to come before Memorial Day (May 30), there should be no rush to implement these new regulations and much more debate and hearings need to take place to make ensure a fair rule making process.