May 11, 2007

Maggie ... Yer Doin’ a Heck of a Job!

By Barmak Nassirian

News of New York Attorney General Andrew Cuomo’s investigation of questionable student loan practices was initially met with dismissive contempt from most of the permanent players in the loan programs. The student loan industry lost precious crisis-management time to cognitive dissonance with the very idea of an enforcement agency that it didn’t control. The student aid profession and its leadership, meanwhile, went through a very public demonstration of the seven stages of grief with the vilification they suffered because of their years of coziness with lenders.

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As public outrage at what was, until a few short weeks ago, perfectly respectable business-as-usual began to build, the players finally understood the Cuomo investigation for what it really was: a rout. Like ragtag remnants of a defeated army in retreat, they shed the insignia of their true identity to don the uniform of the winning side, no matter how ill-fitting and grotesque. Some of the most predatory lenders agreed to abide with the letter — but of course not the spirit — of the Cuomo code of conduct. Organizations that had long ago reduced their ethics to those of an impeccably honest auctioneer retreated from their prior moral stance of always letting the highest bidder win their support in contested policy debates.

Some aid organizations decided to deal with their addiction to loan industry money by going cold turkey. Others chose the associations’ equivalent of methadone treatment by refusing some lender money while accepting it in other forms. The postmodern moment was at hand when the Republican Congressional leaders — whose previous 12-year tenure in majority will forever be remembered as the Gilded Age of loan industry rapacity — indicated that they, too, would introduce legislation to restore integrity to the system they had done so much to create. They even joined the Democrats to pass emergency loan legislation, if only to quickly declare the endemic problems of the loan program resolved and to prevent more meaningful reform of the corporate welfare program they have set up for their political supporters in the loan industry. The point of this street theater of contrition, atonement and conversion, of course, is not real change, but a sufficiently convincing appearance of reform.

By the time Cuomo appeared before the House Education and Labor Committee for the Washington equivalent of his triumphant march, the chorus of special interests had practiced their new reformist tune enough at least to delude themselves and maybe even fool the inattentive passerby. But the careful staging suffered one fatal flaw: one of the lead actors had apparently slept through the rehearsal and was loudly and unabashedly singing off-key. Enter Margaret Spellings, stage left!

Far from striking an apologetic — or at least conciliatory — note for having so miserably failed to do her job while student loan corruption festered under the department’s nose, the secretary of education has chosen instead to sing an all too familiar tune of brazen defiance. On the very day of Cuomo’s testimony — a day that, like others implicated in the scandal, she should have wisely spent away from the public eye — she actually issued a remarkable press release to refute the reality that everyone else could by now discern.

The secretary’s statement, and her subsequent testimony Thursday before the House committee, combined outright ignorance of some of the facts already in evidence and denial of others. It also unapologetically rejected any personal responsibility for the debacle, citing the complexity of the job, which Spellings has apparently only grasped after Cuomo stepped into the vacuum created by her inattention. In fairness, the secretary’s testimony did manage to identify mistakes at her agency, but they all dated back to the period before 2001, when the administration effectively handed the loan programs to past and future employees of the student loan industry to run as they saw fit! As a rhetorical device, her Congressional appearance combined the tenuous grasp of facts, irritated denials, and vague promises that are the hallmarks of having been caught asleep on the clock. It is déj� vu, all over again: think Tommy Thompson and his ludicrous public comments as anthrax was being mailed around the country; the hapless Brownie as Katrina ravaged New Orleans; or Alberto Gonzalez as he explained to the Senate Judiciary Committee how he didn’t really run the Department of Justice.

Like so many other hopelessly under-qualified Bushies in high office, Spellings brought little by way of independent accomplishments hitherto expected of a cabinet appointee. Not only was she no Dick Riley or Lamar Alexander, her non-patronage résumé was actually even less impressive than that of her predecessor, Rod Paige! What she lacked in independent credibility for the job, however, she has made up with officious self-importance and a messianic belief that she is the right person in the right place in history to transform American higher education. Ironically, the euphemism Spellings has used repeatedly to describe this obsessive illusion of grandeur is, of all things, “accountability!”

In the Spellings lexicon, accountability is codeword for a prosecutorial assault on the traditional collegiate sector for alleged evils that range from lack of transparency, profligacy, inefficiency, and incompetence to political tendentiousness. There is no denying that, like every other human endeavor, American higher education partakes of all these qualities to some degree. And a thoughtful examination of the future of higher education would certainly not be a bad idea. But Spellings has approached the effort not only with dogmatism, but also with a Vaudevillian’s knack for committing every one of the sins for which she has taken higher education to task.

Her tenure in office has thus far consisted of a quixotic frolic to assert substantive federal control on colleges and universities through a variety of politically motivated and legally suspect maneuvers. Describing this detour from her legal responsibilities as overseer of the loan system in terms of sheer incompetence would, in a very real sense, be the more charitable explanation of the loan debacle. A more cynical mind could take the secretary’s pugilism on the collegiate front as a sideshow intended to distract attention from the wholesale looting of the treasury by the administration’s loan industry friends. But the authenticity of her performance at the hearing tends to favor the more charitable interpretation: I for one am now willing to accept that Spellings simply doesn’t get it. That she has been pursuing ill-advised policies for which she has no legal authority (like federalizing transfer of credit rules), while she failed to do what she has had ample authority and legal responsibility to do (like overseeing lenders and protecting the students and taxpayers), is apparently too complex a proposition for the secretary to be contemplating even now, after it has become clear that she has been playing the fiddle while Rome burned.

Whatever else it may bring about, the Cuomo investigation has demonstrated the emptiness of the secretary’s haughty pronouncements on accountability. What is already known of the department’s inaction — if not outright complicity — in the scandal amply demonstrates that accountability was the last thing this secretary demanded of the companies feeding at the federal trough on her watch. The disingenuous nature of the Spellings gospel of accountability becomes all the more apparent in light of her post facto reaction to the scandal. Her press releases and disavowal of authority and responsibility are ample enough proof that the thought that accountability applies to her as well has yet to cross the secretary’s mind.

And what’s the average borrower confronting this debacle to think? One apt thought may well be that you go to college with the Department of Education you have, not the one you ought to have. A heck of a job indeed!

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