Keeping Things in Perspective: The Student Loan Scandal

By Bryan O'Keefe

Few people have been more critical of the student loan industrial complex than this blog over the past 9 months or so. And we have been especially harsh on colleges and universities in light of the recent scandal over kickbacks and payments paid in order to be listed as a preferred provider of student loans. There is no doubt that the scandal is a major one and will have significant consequences for both the universities and private lenders for some time to come.

But my greatest fear was that the scandal would turn into a lot of finger-pointing and blame and would not become a siren call for more comprehensive higher ed reform. Unfortunately, that’s exactly what is happening. Consider the story in today’s New York Times which claims that Sen. Kennedy has now asked the Department of Education for the complete personnel files of 27 department employees.

I am not exactly sure what the Senator would do with these files, even if the Department handed them over (which I doubt they will). If he is looking for conflicts of interest – which are a serious matter – there must be less intrusive ways to accomplish that goal. As somebody who also follows labor and employment issues pretty closely, a request from another branch of government to view somebody’s personnel file is very personal and probably an invasion of privacy, especially when the people whose files would be pulled are probably from a different political party than the person asking for the information. It's requests like this that make people very reluctant to leave the private sector for government service.

Back to my original point – there is a tremendous need to get to the bottom of what exactly happened in this scandal. But at the same time, this should not delve into a Democrats v Republicans, Ed Department vs. Congress, who-is-to-blame type fight. We should use this scandal as an opportunity to come up with fresh ideas about how to reform the student aid system, not just another chance to have Congressional hearings and embarrass people politically. That goes for both sides of the political aisle.