By Bryan O'Keefe
No, CCAP is not sponsoring a "Hula Hut Happy Hour" despite how much fun an event like that surely would be. But, as the Wall Street Journal reports this morning, a "Hula Hut Happy Hour" was on the agenda of the Office of Student Financial Services at the University of Texas at Austin. The happy hour was, of course, sponsored by a private lender, and is now another chapter in the scandal over how such lenders influenced schools to gain a spot on their preferred lenders list.
What makes the most recent story outrageous isn't just the eccentric name of the happy hour, but rather that the financial aid office would actually rank lenders, "based on the number of lunches, breakfasts and extracurricular functions for entire OSFS staff. Lenders on the list were graded on the quality of their culinary largesse by metrics ranging from "very good" to "poor.""
This type of stuff is simply unfathomable -- an actual ranking system based on who gives out the best freebies? Students at UTexas at Austin should be up in arms over this (I imagine that they are.)
Meanwhile, the Washington Post has another salvo laying blame for the mess at the feet of the Department of Education, claiming that the Department was lax in its oversight role and that many Department officials have ties to the private student loan industry. Some folks quoted in the story however claim that proposed rules that would have clamped down on the private loan industry probably wouldn't have made much of a difference because lenders and schools would have found loopholes.
There is probably some truth to both sides of this. In hindsight, the Department should have probably regulated all of this activity better. But government regulation -- as is usually the case -- would probably not have stopped it completely. At some point, the lenders and schools themselves need to be responsible to the people they are supposed to be serving: the students.
I'd also note that the Post story is another blame-game type story. I don't doubt for one second that we need to get to the bottom of this, but, what about more comprehensive reform? Why can't we take this scandal and use it to propose something different from our current system?