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USA Funds' Ties to Education Department Adviser

March 21, 2017
 
 

Taylor Hansen last week ended a brief stint advising Betsy DeVos, the U.S. secretary of education. Hansen, who formerly worked for a for-profit higher education trade group, is the son of Bill Hansen, the president and CEO of United Student Aid Funds, a former student loan guarantee agency that recently changed its name to Strada Education Network and has expanded its work on college completion and career readiness.

The Education Department last week rescinded a 2015 guidance document from Obama administration that prevented guarantee agencies from charging collection fees for defaulted borrowers who begin repaying their loans quickly. In January, USA Funds paid $23 million to settle a lawsuit from borrowers, in which a federal appeals court sided with the Obama administration's take on collection fees.

Bloomberg News on Monday reported on USA Funds' ties to the younger Hansen. The article quoted critics of the department's decision last week, including Senator Elizabeth Warren, a Massachusetts Democrat, who said the Hansens' family connection was a conflict of interest.

In a written statement, Strada said it separated from the guarantee agency side of USA Funds in January.

"No one representing Strada Education asked Taylor Hansen to intervene on our behalf with the U.S. Department of Education to change its interpretation of the July 10, 2015, Dear Colleague letter regarding student loan collection fee policies," the group said. "The Department of Education violated the federal Administrative Procedure Act when it originally issued the Dear Colleague letter. The department’s March 16 decision to withdraw this Dear Colleague letter corrects that violation."

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