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Secretary Duncan Misses Opportunity to Answer Gainful Employment Concerns


Posted by Chris Prandoni on Tuesday, June 7th, 2011, 2:56 PM PERMALINK


Not even trying to hide the partisan intent of the Health Education Labor and Pension (HELP) under Sen. Harkin’s leadership, today’s committee hearing was titled Drowning in Debt: Financial Outcomes of Students at For Profit Colleges. This is not the first time Sen. Harkin (D-Iowa) has convened the HELP committee to help grind his axe with for-profit colleges, and will likely not be the last. Given the intent and witness list for today’s  hearing it is not surprising that Senate Republicans did not show up. What would have been the point?

The seemingly endless hearings and subsequent fuss is over the Department of Education’s (DOE) gainful employment regulation. In short, the DOE reinterpreted longstanding metrics regarding federal student aid, effectively barring students from attending for-profit institutions that did not meet new, arbitrary standards. Click here for a more thorough explanation.

Today’s hearing may have been worthwhile if DOE Secretary Arne Duncan had showed up, as he was scheduled to. While the gainful employment rule is controversial in itself, the circumstances from which it originated are, as Sen. Tom Coburn (R-Okla.) said, “criminal.” There is ample evidence to suggest that DOE officials and non-profit education groups worked with Wall Street traders to write the gainful employment rule. This is problematic because traders—using what should have been proprietary information—short sold for-profit colleges’ stocks once they knew the gainful employment rule was going to be introduced. It is due to the potentially dubious communication between DOE officials and financial executives that Americans for Tax Reform President Grover Norquist urged the Securities and Exchange Commission Director of Enforcement Robert Khuzami:

“to investigate the Department of Education and the rulemaking process surrounding the “gainful employment” regulation. Such an investigation is necessary to determine whether or not Department of Education officials were complicit with short-sellers during the drafting of the gainful employment rule.”

Arne Duncan has been surprisingly silent about the events and circumstances leading up to promulgation of the gainful employment rule. Today’s hearing would have been as good a forum as any for Secretary Duncan to clear the air surrounding the controversial decision. The Secretary’s absence was a missed opportunity and certainly raised some eyebrows from Republican senators who were looking forward to engaging the man charged with running the Department of Education. Until this happens, a dark cloud will remain over the Department of Education and its controversial rulemaking.  

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