Fixing The Biden DOE’s Legendary List of Abuses
Nicholas Kent, nominated for Under Secretary of Education, has a significant opportunity to help the Department of Education overcome the lawlessness of the past administration. This is because the under secretary oversees both the leadership of the Office of Federal Student Aid and the regulations that gatekeep access to student loans, which have suffered many losses in court.
The last administration became notorious for multiple failed attempts to enact student loan “forgiveness” and various . Under President Biden, anti-capitalist bureaucrats sought to knock markets and profits out of education wherever remotely possible.
In particular, the department revived its (GE) regulations and began zealously enforcing its (BD) regulations. Together, these rules were intended to knock for-profits out of the field and deter others from ever entering.
The department’s strategy was, first, to claim students were defrauded when they didn’t earn enough money after graduation, then cancel students’ federal loans en masse at colleges’ expense. Even without a claim of fraud, failing the GE test could trigger vigorous action to cut off a college’s federal student aid.
The goal: Punishing disfavored educational institutions into dissolution.
Fortunately, courts have put the BD rules and parts of the GE rules on ice. But the Biden administration has pushed to squeeze for-profits in other ways.
Most notably, the department broadly reinterpreted what it meant for a college’s service partner to be a “third-party servicer,” over-defining the term so egregiously that it even extended to nonprofit and public colleges’ partnerships. The was so strong that the department backed down even before the courts got involved.
Meanwhile, the Office of Federal Student Aid its Office of Enforcement against another disfavored target: Christian universities with large online enrollment. The administration specifically targeted Grand Canyon University and Liberty University with outlandish enforcement actions and fines. Grand Canyon University sued and won vindication in court (with a decision in the Ninth Circuit).
All of this sets the stage for Nicholas Kent, who is supremely able to understand, resolve, and reverse these abuses.
Kent spent six years in policy-oriented leadership roles at the organization Career Education Colleges and Universities. Earlier, he served in policy roles for other public and private entities.
Also, for the past 18 months, Kent has served as Virginia’s Deputy Secretary of Education. He’s even worked in the little-understood field of accreditation. Altogether, Kent’s experience gives him direct knowledge of the practical consequences of the department’s higher education work.
Key areas that his office could pursue include:
First, settle the various lawsuits against the department and agree that the plaintiffs are correct.
This means acknowledging the prior leadership’s unlawful actions: it misread statutes, violated the Administrative Procedure Act, ignored the Major Questions Doctrine (far exceeding the agency’s interpretive authority), and more. This also means providing colleges with assurance that the agency will not make such mistakes again. Kent’s office could fully withdraw Biden’s BD and GE rules and make clear that the relevant laws do not authorize sweeping regulation of higher education.
Kent’s office could similarly resolve any remaining student loan “forgiveness” lawsuits. After suffering so many losses in court, Biden’s team largely threw in the towel on loan cancellation. But some litigation remains. Just recently, the Eighth Circuit court prevented the application of one of the loan cancellation schemes .
Furthermore, as the department tried to save its “forgiveness” schemes, it frequently its interpretation of the rules applying to borrowers and to their loan servicers. To keep its schemes alive, the agency chose to issue more and more guidance documents and directives.
The result was massive chaos. Does anyone today—borrowers, servicers, or members of Congress—know the true situation for tens of millions of borrowers? How many months of forgiveness credit does each borrower have? What is their actual income for the purpose of income-based repayment programs? Do we even know which loan repayment program applies to each borrower?
The Office of Federal Student Aid (FSA) may need to undergo a very expensive forensic accounting audit to resolve this chaos. In the course of a full audit of the office, auditors might also find that the thousands of FSA staff could easily be replaced with around 20 senior staff. If that reform were to occur, the rest of the work could be left to loan servicers who ought to be minimally regulated, letting them pursue efficiency as private-sector companies rather than as micromanaged bureaucratic agents.
The larger opportunity is for Congress to begin dismantling the Department of Education, eliminating its programs, and entirely returning loan origination and servicing to the private sector.
But Nicholas Kent, once he’s confirmed, will have enough to fix.