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Mission Accomplished

May 18, 2010

WASHINGTON -- If politics were as data-driven as baseball, and scorekeepers kept a statistic to measure how much impact a person had per day or week or month, Robert Shireman would almost certainly have made the all-star team.

The U.S. Education Department confirmed today that Shireman, the U.S. deputy under secretary of education, will leave his position in early July after 14 months in the job. Shireman's departure was widely expected, given that he and his family had been happily ensconced in the Bay Area for more than a decade and that the primary goal that drew him back to Washington -- the prospect of securing the future of the government's Direct Student Loan Program and ending all lending through the competing Federal Family Education Loan Program -- was accomplished when Congress passed budget legislation in March.

But as Shireman prepares to end his second (and much shorter) stint in the nation's capital, fans and critics alike -- with either enthusiastic appreciation or grudging admiration/agitation, depending on their perspectives -- are taking note of just how much he got done in his time in the Obama administration.

The effective dismantling of the lender-based guaranteed loan program, which was made possible by several environmental factors as well as Shireman's political skills, was by far the signature achievement. But he also made major progress in expanding a nascent federal program -- for which Shireman had advocated in his previous job, as founder of the Institute for College Access and Success -- that allows borrowers to repay student loans based on their post-graduation incomes. Financial aid experts also hailed the progress that the department, under Shireman, made in simplifying the financial aid application process.

And at Shireman's urging, the department also took on a less obvious but also highly visible cause: tougher regulation of the for-profit higher education sector, which is expected to lead to the release any day now of new rules that could force some college companies to improve their student outcomes, cut their tuition prices, or face the loss of federal student aid funds.

Given the brave new world of higher education policy making, in which for-profit colleges educate nearly 10 percent of all students and the companies are a force on Wall Street, Shireman's every action toward and utterance about the sector -- many of which have been perceived as critical -- has had the potential to move the stock market.

So it was perhaps fitting that when news broke of his pending resignation late Monday afternoon, stocks of the 10 publicly traded higher education companies shot up by between 1 and 13 percent before the closing bell. Wall Street analysts speculated that Shireman's departure "would remove the largest advocate" (as one put it) of formulas the department is planning to propose to gauge the ratio of their graduates' loan debt to the salaries they earn -- though the assumption that Shireman's colleagues in the department don't share his support for the approach is questionable.

Not only that, but a department spokesman said that Shireman will "stay on in an advisory capacity to ensure a smooth transition." So he is expected to continue to hold sway in the Obama administration going forward.

Supporters say Shireman has left a huge imprint on federal policy making in higher education, with a focus on the needs of students. "The amount that he has accomplished in a very short period of time is truly remarkable," said Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education. "He has been as effective as any executive branch appointee I can recall in moving a postsecondary agenda forward."

"Every good thing that has happened in federal higher education policy over the course of the last 20 years has had Bob Shireman’s fingerprints on it," said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. He includes in that list the creation of the direct loan program (in which Shireman joined while an aide to the late Sen. Paul Simon of Illinois), several programs he helped create while in the Clinton White House, and the "program integrity" rules he is pursuing now -- and, of course, the changes in the student loan program.

"The elimination of the parasitical student loan industry from the higher education financing system would sound surrealistic had I not lived to see it," Nassirian said, in his typically understated way. "But the income-based repayment system may well be a more lasting contribution than the structural changes in the loan programs, because it will help address the student debt crisis decades into the future."

Many representatives of the targets that Shireman has sought to transform -- the student loan and for-profit college industries -- demurred from talking publicly about Shireman's influence, perhaps because they believe he will still have the ear of Obama administration officials when he returns to the Left Coast. But they generally shared his fans' view of his effectiveness, though they often thought his policies were wrongheaded and often viewed him as an ideologue who, when it suited him, engaged in demagoguery.
In other words, he was a politician.

Political Skill or Good Fortune?

Figuring out just how much credit Shireman deserves for the monumental changes wrought by the Obama administration can be tricky, because his formal involvement began only in November 2008, when he became an adviser to President-elect Obama during the transition. Candidate Obama had already called for ending lending through the bank-based student loan program (as had his Democratic opponents), but Shireman, as one of the foremost Democratic higher ed policy experts, has had the ear of many Democratic presidential candidates in the last decade.

The idea of ending the guaranteed loan program might have seemed like a long shot during the campaign, but events had already conspired in Obama's (and Shireman's) direction in 2008 when the financial markets collapsed and the Bush administration had to step in to prop up the student loan programs. That move (along with the student loan influence scandal of 2007-8) severely weakened the student loan industry's sway on Capitol Hill, and Obama's coattails helped Democrats expand the control of Congress that they had more narrowly won in 2006. Those developments opened the door for Obama's bold budget plan in 2009, which called for using tens of billions of dollars in savings from ending the lender-based program to greatly expand Pell Grants for needy students.

The fiscal and political environment may have given Shireman's idea a smoother path, but it was his combination of external geniality and internal single-mindedness (to his admirers) or intransigence (to his critics) that helped the administration achieve so many (if not all) of its goals. The administration notably failed in the loan makeover to turn the Pell Grant into an entitlement.

What happens next with Shireman's position is unclear. Education Secretary Arne Duncan appointed him to the newly created position of deputy under secretary in part because, unlike the traditional top federal higher ed jobs of under secretary and assistant secretary for postsecondary education, it did not require Senate confirmation, which some thought Shireman might struggle to win because of his history of critiquing the student loan industry.

So Shireman would not necessarily have to be replaced, given that Under Secretary Martha J. Kanter and the newly confirmed assistant secretary, Eduardo M. Ochoa, are in place. That seems possible, since the administration is expected to focus on elementary and secondary education in the next year or two anyway, given the need to renew the Elementary and Secondary Education Act, better known in recent years as No Child Left Behind.

But with President Obama having set the ambitious (and difficult, if not impossible, to achieve) goal of increasing the proportion of Americans with postsecondary credentials to 60 percent by 2020, and the Education Department facing the task of absorbing huge numbers of colleges and student borrowers into the direct loan program, a decision not to replace the key idea man in the Education Department could send a message that the administration is backing away from its goals, a signal it is unlikely to want to send.

Speculation about who might replace Shireman under that scenario has centered on a few people: Michael Dannenberg, who joined the Education Department this year after a career as an aide to the late Sen. Edward M. Kennedy and as founding director of the New America Foundation's Education Policy Program, and James Kvaal, who worked with Shireman in the Clinton White House and now works on higher education and other social issues as a senior director at the White House National Economic Council.

 

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