Boehner, the Bane of Public Education

All Bush loyalists are eventually rewarded, and it would seem that Boehner is now getting his for actions as a steadfast lieutenant in the neo-con war on public education, whether aimed at kindergartens or graduate schools. The Bushies know, too, that there is so much more work yet to get done, with the upcoming recommendations from the Commission that Spellings hatched to build support for the corporatizing of the American university system. And, of course, there is the unfinished Whittle nitemare to use NCLB sanctions as the lever to privatize K-12 education and to soak up the half-trillion spent there every year. With jobs flooding overseas and with Harley-Davidson worth more than General Motors, education is the real growth industry--and all the unemployed energy traders from Enron are looking for an angle.

Who else, then, besides Boehner is better postioned to lead this wing of the corporate socialist phalanx? He already has availabe an able network of crooks and whores who know how to squeeze the giving tree and where to squeeze it. And he has just showed how he can deliver on student loan cuts to help assure more tax cutting, while at the same time lining the pockets of his largest contributors. He's perfect.

Here are just a couple of examples from news stories that do not even get into the scandals from the 90s. Boehner is, indeed, worthy of a lead role in the current regime.

First try this from the Post on Boehner's PAC that he calls the "Freedom Project":

In the most recent election cycle, 2003-2004, the Freedom Project received $572,719 from individuals, according to records filed with the Federal Election Commission and analyzed by PoliticalMoneyLine. More than half of that, $292,570, came from employees and lobbyists for private student lending companies and for-profit academic institutions.

Individuals affiliated with the private student-loan industry gave the PAC $220,020, including $52,670 from officers of Sallie Mae. Sallie Mae was established in 1972 as a government-sponsored organization that over the past decade has become privatized, and is now a Fortune 500 company specializing in student loans.

Boehner's PAC received $72,550 in donations from employees and lobbyists from for-profit colleges and trade schools.

The largest single source of money from the for-profits, $17,500, was given by corporate officers and senior employees of California-based Corinthian Colleges Inc., a for-profit educational firm which disclosed eight weeks ago that the Florida attorney general is investigating a Florida subsidiary.

Boehner has sponsored legislation strongly supported by private student lenders to restrict the ability of the U.S. Department of Education to make government student loans less expensive by cutting fees. Student loans constitute a multibillion-dollar market in which the nonprofit government and for-profit private lenders compete.

During the current congressional session, Boehner's committee endorsed his legislation to allow the for-profit colleges and trade schools to gain millions of dollars in federal subsidies.

The measure would eliminate 1992 regulations designed to prevent the for-profits from signing up unqualified students and collecting student loans for tuition. Boehner would bar traditional colleges from denying credits earned at for-profits on the grounds that the for-profits are not accredited.

The Boehner proposals to deregulate the for-profit schools was strongly opposed by a coalition including the United States Student Association, American Association of Collegiate Registrars and Admissions Officers, the National Association for College Admission Counseling and the American Federation of Teachers. They cited a series of recent controversies and investigations involving the for-profit colleges.

"Boehner has been a supporter of" for-profit colleges and trade schools, and private student lenders "since he first came to Congress," said Don Seymour Jr., his press secretary. Other staff members pointed out that as a conservative Republican, Boehner believes private-sector companies subject to market forces will likely provide better and cheaper services than the government.

Critics of Boehner argue, however, that he has provided government subsidies and rules designed to give private-sector providers unfair advantages over public-sector loan and postsecondary education programs.

"The claims of being pro-free market are at complete odds with the behavior of this [Education and the Workforce] committee," said Barmak Nassirian of the American Association of Collegiate Registrars and Admissions Officers. He said Boehner showed "chutzpah" in citing competitive markets when the education committee in practice promotes a "command and control system for lenders, with guaranteed outcomes."

Then sample this story from Forbes.com, which makes a nice addendum:

As chair of the education committee, he [Boehner] has championed the schools' position that students, who have earned credits in the for-profits, should be able to transfer them more easily to traditional, not-for-profit private and public universities.

He also wants to force students at traditional universities to fund 10% of their education with money from non-government sources, just as those at for-profits are required to. Such changes would put Corinthian Colleges (nasdaq: COCO - news - people ), Apollo (nasdaq: APOL - news - people ), Career Education (nasdaq: CECO - news - people ) and Education Management (nasdaq: EDMC - news - people ) on a more equal footing with not-for-profit universities.

The Pre-Owned "Representative from Sallie Mae"

Gerald Bracey notes that after Congress stripped vouchers from NCLB during its crafting, Boehner tried on six separate occasions to get them back in. Failing that, he got the next best thing: impossible AYP requirements that assure the failure of most public schools by 2014.

Here is part of a piece on Boehner from TomPaine.com (by Robert Borasage):

. . . For a Republican caucus that can barely summon a majority to pass a ban on former members-turned-lobbyists using the House gym, while grousing about anything approaching real reform, Boehner is the perfect choice.

And for the rest of us, Boehner personifies how the cost of corruption in Washington gets passed on to ordinary Americans. As chair of the Education and Workforce Committee, he is known as the “representative from Sallie Mae.” Sallie Mae is the leading provider of loans to college students and their parents, and Boehner has consolidated his leadership by dispensing big bucks raised from lenders in campaign and party contributions. In fact, the Center for Responsive Politics reports that Sallie Mae is the biggest donor to Boehner's political action committee, called Freedom Project.

In return, he protects their interest. Most recently, he helped develop and push through legislation that may weaken the loan industry’s competition—the Direct Student Loan program, where students bypass Sallie Mae and others and borrow directly from the government. While taking it to their competition, Boehner openly reassured bankers that they would not be harmed greatly by this legislation—as reported in the Chronicle of Education —he informed a group of bankers that they could rest easy in his “trusted hands.”

College tuition is soaring, and grant levels aren’t keeping up. Under Boehner’s leadership, Congress has refused to raise the top level of Pell grants, despite repeated campaign pledges by George W. Bush to do so. As a result, more and more students have to work part time, while taking on ever greater levels of debt to pay for college. Already, hundreds of thousands are having college priced out of reach; thousands more drop out, unable to sustain the burden of classes and work and debt. And those that do make it will find the difficult burden of paying of those loans just got harder.

The new pre-owned leader of the Republicans in Congress is rewarding the bankers that contribute to his campaigns by protecting their profits and threatening their competition. And in this most corrupt Congress, he’s portrayed as the reformer. When the stench gets this thick, it is no wonder that people start talking about cleaning the stables.

Billee Bussard provided this pertinent detail: While Pell Grants have remained unchanged for the past four years, tuition in state schools, take Florida for instance, has increased by 37% or in-state and 64% for out-of-state.

Save Head Start from Religious Indoctrination---Call Your Congressman

This comes from Judy Rabin:

Advocates for Head Start are justifiably concerned that the fight over religious hiring rights will jeopardize the reauthorization of the Head Start program this Congress. Head Start is too important to be held hostage to such naked partisan politics. JR

September 16, 2005

To: Education and Legal Affairs Reporters, Editors, and Columnists

From: Coalition Against Religious Discrimination (CARD)

RE: Government-Funded Religious Discrimination in Head Start Programs

This week, the House of Representatives will debate legislation reauthorizing the historic anti-poverty Head Start preschool education program – which has helped millions of disadvantaged children by providing access to quality preschool education programs. The House Education and the Workforce Committee approved this measure, H.R. 2123, the School Readiness Act, by a vote of 48-0 on May 18, 2005. Despite bipartisan, unanimous support for the bill in his Committee, Chairman, Rep. John Boehner (R-OH), with the support of the Bush Administration, has announced that he intends to offer an amendment on the floor of the House to repeal existing, longstanding Head Start provisions which prohibit religious organizations and churches from discriminating on the basis of religion when hiring or firing staff for positions within this federally-funded program.

The House of Representatives has never voted to repeal existing civil rights protections in a floor amendment, and here it is being done without the benefit of committee hearings, debate, and testimony from experts. This unwelcome action would also undermine the existing broad, bipartisan support for reauthorizing Head Start, one of the most heralded anti-poverty programs in the nation’s history.

Head Start

Head Start is a widely-acclaimed early childhood education program established in 1965. This anti-poverty program serves close to one million disadvantaged preschool children in hundreds of communities across the country. The program has also been a ladder out of poverty for many disadvantaged parents who have become employed as teachers and staff after having first served as volunteer teacher aides in their children’s classroom.

Since 1972, agencies that receive government funding for Head Start – including religious organizations and houses of worship that host Head Start programs – have been prohibited from discriminating on the basis of religion when hiring or firing staff for positions within the federally-funded program. These existing non-discrimination requirements have a history of bipartisan support, and were originally signed into law by President Richard Nixon. The current anti-discrimination language was included in the 1981 Head Start reauthorization bill, signed into law by President Ronal Reagan. These same civil rights protections have been included in every Head Start reauthorization since then – in 1984, 1986, 1990, 1994, and 1998. For 33 years, these fundamental non-discrimination protections have worked well, allowing thousands of Head Start programs in communities throughout the country to flourish while maintaining constitutional and civil rights safeguards against religious tests for employment in federally-funded programs.

The Boehner Religious Discrimination Amendment is Unnecessary

Chairman Boehner has said that he is “committed to adding language to this bill that will ensure faith-based organizations can compete for federal Head Start grants without surrendering their constitutionally-protected right to take religion into account in their hiring practices.” But faith-based organizations do not have a constitutionally-protected right to use federal funds to discriminate on the basis of religion in government-funded positions.

Under current law, faith-based and secular organizations are already equally eligible for Head Start funding. More than five percent of all Head Start programs are administered by houses of worship or religiously-affiliated organizations. These programs currently operate effectively -- and manage to do so without making employment decisions based on the religious beliefs of their teachers and parent volunteer. This success is due, in part, to the fact that these organizations are required to abide by strong constitutional and anti-discrimination safeguards -- protecting beneficiaries from unwanted proselytizing and protecting employees in positions funded by these federal programs from religious discrimination.

The Coalition Against Religious Discrimination (members included below) supports the right of churches and synagogues to perform their religious mission with their own private funds. But federally-funded religious discrimination is always wrong. It is especially damaging in the context of the enormously influential Head Start program.

The Boehner Religious Discrimination Amendment Raises Constitutional Concerns

This proposed change runs afoul of considerations underlying the First Amendment’s prohibitions against the use of direct government funding to promote religious beliefs. When Head Start programs operated by faith-based organizations discriminate on the basis of religion in hiring for government-funded positions, the government becomes associated with promotion of a religious mission in a manner that the Establishment Clause was designed to prevent.

The Boehner Religious Discrimination Amendment Would Damage Head Start Programs.

If Congress approves such an amendment, teachers and staff working at Head Start programs housed in religious organizations could immediately be fired because of their religion. Tens of thousands of already at-risk children could lose their teachers. And Head Start could lose thousands of parent volunteers essential to the success of the program merely because those parents do not share the religious beliefs of the host federally-funded religious organization.

The Boehner Religious Discrimination Amendment is Divisive and Jeopardizes Head Start Reauthorization

The Head Start bill, in its current form, has wide, bipartisan support. The House Education and the Workforce Committee approved the reauthorization legislation by a unanimous vote – retaining existing civil rights and anti-discrimination provisions. These anti-discrimination provisions have enjoyed bipartisan support since President Richard Nixon signed them into law in 1972. Allowing religious discrimination in Head Start programs is controversial -- and will undoubtedly divide legislators as efforts to reauthorize the program move forward.

Two years ago, Congress was unsuccessful in an attempt to reauthorize Head Start due to an inability to reach consensus on a number of controversial amendments – including one similar to the Boehner Amendment – which was not included in the Senate version of this legislation. At that time, Members of the House engaged in heated debate over the anti-discrimination provisions, which had been eliminated during Education and the Workforce Committee markup. During the 108^th Congress, on July 25, 2003, the House defeated an amendment, offered by Rep. Lynn Woolsey (D-CA), to reinstate these civil rights provisions by a vote of 231-199, with only four Republicans voting to reinsert the anti-discrimination provisions and only seven Democrats voting against the amendment. The Senate reauthorization bill stalled; the Committee-approved bill was never received a vote on the floor.

In this Congress, the Boehner religious discrimination amendment would unnecessarily politicize what has been a remarkably bipartisan effort to reauthorize Head Start. On two previous occasions Rep. Boehner has voted to affirm the current anti-discrimination language as part of the Head Start reauthorization (the 1994 and 1998 reauthorizations). But now, as the Bush Administration aggressively promotes its Faith-Based Initiative, the Republican majority is seeking to repeal these longstanding civil rights provisions.

The notion that efforts to eliminate these civil rights provisions are politically motivated was recently affirmed in testimony by an unlikely source -- David Kuo, former Deputy Director of the White House Office of Faith-Based and Community Initiatives. In testimony, before the House Government Reform Subcommittee on Criminal Justice, Drug Policy, and Human Resources on June 21, 2005, Kuo stated: “[M]any members of the President’s own party expressed equal parts apathy and antipathy towards this agenda. Money for the poor? Why, it will just get wasted, they said. We just need to cut the funds and let the private sector take over. We don’t need more funds, all we really need to do is make sure that we have a huge political fight over religious charities’ right to hire and fire based on their own faith. That way, as I have heard time and time again, Republicans will be seen as fighting for religions and Democrats will be seen as fight against it.”

Advocates for Head Start are justifiably concerned that the fight over religious hiring rights will jeopardize the reauthorization of the Head Start program this Congress. Head Start is too important to be held hostage to such naked partisan politics.

Proselytizing in Head Start Programs is Clearly Illegal

Supporters of the Boehner Amendment argue that discriminating in hiring is essential in the advancement of the mission and goals of faith-based Head Start programs – but they do not assert that proselytizing in Head Start programs is legal. Since there is no dispute that proselytizing and religious activities cannot be integrated into the highly-structured Head Start curriculum anyway, such justifications are wrong. The religious background of the staff and faculty of a Head Start program are irrelevant – since faith-based providers are not allowed to teach religion with federal funds anyway. While the faith tradition of an organization may motivate it to become a Head Start provider, religious beliefs clearly may not be taught with federal dollars.

Conclusion

The expected Boehner amendment to permit religious discrimination in hiring and firing for faith-based Head Start programs is divisive, unwise, unnecessary, and unconstitutional. Congress should reject efforts to burden this historic anti-poverty program with “a huge political fight.” The needs of disadvantaged preschool children and their families should not be held hostage to a partisan effort to inject religion into this essential federal program.

Boehner Had the Solution Before Miller Manufactured the Problem

Roanoke Times, July 18:

The credentials of House Majority Leader John Boehner, R-Ohio, as a reformer were suspect from the beginning.

But since Republicans elected him early this year to succeed the scandal- and indictment-tainted Tom DeLay in the No. 2 spot in the House, Boehner has gone out of his way to dispel any notion that he's interested in changing the corrupt business-as-usual in Congress.

As The New York Times reported last week, Boehner is raising more money from lobbyists than DeLay did when he first took over as majority leader. . . .

The Times reports today that New York, more vigilant than many states, has found deeper corruption than was first indicated in the for-profit diploma mill, Interboro Institute, "one of the largest, fastest-growing profit-making colleges in New York State in recent years."

What does Interboro's corruption have to do with Congressman Boehner? Nothing, except that Boehner was responsible for pushing through Congress laws to favor for-profit and online colleges, i. e., to allow them to exploit, through saturation advertising in places like subways, low-income students who qualify for federal Pell Grants and subsidized loans through private lenders, money that is then signed over to outfits like Interboro when these ill-prepared students enroll.

So while Charles Miller and John Boehner beat their chests about the need for increased accountability and greater access for minorities in the university , keep in mind that the accountability they demand does not extend to the corrupt lenders and the for-profit diploma mills that are set up to drain federal education funds from those programs intended to help the same minorities that these corporate socialists purport to care about by lending them federal education dollars that their cronies and contributors then take back in exchange for a worthless piece of paper.

Saving 300,000 Teaching Jobs Equal to 2 Months of War Expenses in Iraq and Afghanistan

(Slide from National Priorities Project) Click to enlarge.

When the Wall Street bankster scheme was finally discovered in late 2008, the Feds under Bush rushed in $700 billion to rescue the the same fraudulent banks, insurance companies, and "lenders" that stole the money.

Since 2001, the U. S. has averaged wasting $111 billion per year in Iraq and Afghanistan. The peak war spending year was FY 08, when $184.5 billion was spent on both war fronts. That's over $15 billion per month.

Tom Harkin is now begging the Republicans to go along with a rescue effort to provide $23 billion to save up to 300,000 teaching jobs next year from being cut, cuts that would represent yet another legacy of the bankster heist from 2008. If we were to become so generous as to pay out to teachers that $23 billion per year, it would take over 43 years to spend as much as we have spent so far for killing in Iraq and Afghanistan.

Here is a nice post on the subject of teacher assistance by Steve Benen at Washinton Monthly:

. . . .Yesterday, House Minorty Leader John Boehner (R-Ohio) announced his position on the legislation. Care to guess what he thinks? Yep, he's pro-layoff.

"The American people recognize that Washington's out-of-control spending is hurting our economy and stifling job creation, and they're asking their elected leaders to make tough choices on fiscal responsibility. Unfortunately, the Administration's call for another $23 billion to pad the education bureaucracy will only make state governments more dependent on the federal government and more vulnerable when the federal funding explosion disappears. [...]

"Giving states another $23 billion in federal education money simply throws more money into taxpayer-funded bailouts when we should be discussing why we aren't seeing the results we need from the billions in federal dollars that are already being spent."

Whether Boehner actually believes his own press releases is a matter worthy of debate, but either way, his arguments seem oddly detached from reality. Spending is "hurting our economy and stifling job creation"? In Grown-Up Land, spending rescued the economy and generated the strongest job creation in years.

Just as importantly, what does Boehner think the economic impact will be if 300,000 school teachers are forced from their jobs nationwide?

Of course, notice Boehner's emphasis on this being a "bailout" -- a line Fox News is running with. As Republicans see it, emergency aid to prevent teacher layoffs must necessarily be connected in the public's mind with rescuing Wall Street with TARP.

Please.

Doug Thornell, a spokesperson for DCCC Chairman Chris Van Hollen (D-Md.), said in a statement, "Yesterday, job-killing House Republicans blocked a bipartisan plan that would help get more Americans back to work. Today, it appears John Boehner and House Republicans want to stand in the way of important funds that would help save teachers' jobs. It is unbelievable that John Boehner, who begged his Conference to support Bush's bailout of Wall Street banks, has the nerve to use teachers and children as pawns in his cynical game to regain the trust of the right wing of his party."

Well, perhaps "unbelievable" is the wrong word -- it's actually sadly predictable -- but the rest of Thornell's sentiment sounds about right.

Blowing the Lid on Student Loan Corruption

Sallie Mae, Nelnet, and Citibank are the top three loan sharks in the $85 billion a year student loan biz, with John Boehner's favorite, Sallie Mae, getting about half. Sallie Mae, in fact, had a 43 percent return last year on its cost of capital for student loans with little or no risk. You see, Congress regulates the interest rates and also makes sure that the taxpayer picks up the bill on student defaults. No wonder Sallie Mae, Citi, and Nelnet know who their sugar daddy and sugar mama are-or was, until the November election. Student loan industry lobbyists are now fanned out over the Capitol spreading cash and the good word about how the loan industry is making sure that poor black students get the money they need to go to college.

The less visible operations in this multi-billion dollar scam involves the other payees in the payola, the universities. For just as Boehner's and Spellings's buddies make it sweet for Sallie Mae, Nelnet, and Citi on the regulatory end, the universities make it sweet on the client end, providing the providers with innocent borrowers looking for a way to go to school. Last October's story on Educap's cancellation of a "loan summit" to Nevis for university officials and their families blew the lid off the university-loan company corruption that now Andrew Cuomo is stirring up in New York.

The New York Times has the latest. It's interesting that the university loan offices that have been nailed are now complaining about a lack of student loan company regulations. In other words, when ethics fail, blame someone else. See if your alma mater is on the list--so far:

Citibank, one of the largest providers of student loans, as well as five universities have agreed to pay $5.2 million to students and the New York State attorney general to resolve an investigation into student loan practices, Andrew M. Cuomo, the attorney general, announced yesterday.

Citibank, which at year’s end had $33.7 billion in student loans outstanding, agreed to pay $2 million into a fund to educate students and parents about student loans.

New York University, Syracuse, St. John’s and Fordham — all in New York — and the University of Pennsylvania will make payments of more than $3.2 million to student borrowers who received loans from companies that paid money to the institutions to steer students their way.

Though neither Citibank nor the universities admitted to any wrongdoing, they all agreed to adopt a code of conduct governing relations between student lenders and academic institutions. St. Lawrence University and Long Island University as well as the State University of New York also agreed to the code.

The agreements follow an investigation into the often undisclosed relationships between student loan companies and universities that often create preferred lender lists. In 2006, students borrowed about $85 billion, according to the College Board.

Mr. Cuomo has singled out in particular a practice he called “egregious,” in which loan companies give universities back payments that rise along with the volume of private student loans from the schools. Private loans are not secured by the federal government.

Lenders have also invited university officials on expense-paid retreats. And at several institutions, call centers operated by loan companies handle student questions about financial aid. Each arrangement, critics say, creates an incentive to steer students toward particular lenders regardless of the loan terms they are offering.

The National Association of Student Financial Aid Administrators issued a statement accusing the attorney general of tearing “the fabric of trust between schools and students” and adding “any preferred lender list abuses and genuine conflicts of interest should end, however such abuses are rare.”

Lawyers in Mr. Cuomo’s office are in negotiations with about 60 additional academic institutions and with other loan companies. Mr. Cuomo has announced his intention to sue one loan company, Education Finance Partners of San Francisco, for deceptive business practices in paying colleges based on private student loan volume.

Under the agreement, New York University will set aside nearly $1.4 million, or all that it received over a five-year period from Citibank, to be distributed to students who took out a loan during that time. In two other cases involving Citibank, the University of Pennsylvania will repay $1.6 million received over two years and Syracuse will pay back $164,084 received over three years.

In cases involving Education Finance Partners, St. John’s University will pay $80,553 and Fordham will pay $13,840.

Under the code of conduct agreed to by the eight institutions and Citibank, universities and their employees are prohibited from receiving “anything of value from any lending institution in exchange for any advantage,” the attorney general’s office said, and would have to disclose the criteria used to select preferred lenders.

Citibank, in a statement, said it had participated “only modestly or not at all” in most of the practices singled out by Mr. Cuomo’s office. The company, which makes loans at about 3,000 colleges, said that students at colleges that received payments had “received the best terms, benefits and servicing available.”

The universities’ payments to students will vary with the amount each student borrowed. At the University of Pennsylvania, the compensation fund will pay an average of $500 per student, university officials said. Craig R. Carnaroli, the executive vice president, said the decision to settle was made “to avoid any appearance of impropriety.”

John Beckman, a spokesman for N.Y.U., defended the university’s payments from Citibank. The university used the money to provide additional financial aid to its students, Mr. Beckman said.

“While we and the attorney general’s office do not see eye-to-eye on this, we were able to agree on an industry-wide code of conduct,” Mr. Beckman said in a statement.

At Syracuse, the vice president of enrollment management, David C. Smith, said the university had done nothing wrong but added that there was insufficient regulation of student lending.

Dominic Scianna, director of media relations at St. John’s University, defended the institution’s recommendation of Education Finance Partners as a preferred lender. “The company is one of three St. John’s preferred lenders,” Mr. Scianna said, “each of which was selected for having among the lowest rates in the country, no fees and historically the best service to students.”

Fordham stopped accepting payments from Education Finance Partners after just one year, the university said.

Sallie Mae and Her New Sugar Mamas?

The sleazebags that run the student loan corporations are in a panic. The House just passed its version of a relief bill that would cut interest rates to Boehner's army of loan sharks, cut $19 billion in subsidies to these bottom feeders, and increase Pell Grants. Sallie Mae's lobbyists have never been so busy trying to buy votes in the Senate to alter this picture, and it seems to be having some effect. The Senate version of the bill so far leaves the high interest rates in place, which could translate to billions for Sallie Mae.

Which version of the bill does this corrupt-to-the-core Administration like? And which one is it already threatening to veto? And which one is Sec. Spellings criticizing for not doing enough for minority students, while she lauds the other as "a good, strong step forward"? If you don't know the answers to these questions, go sit in the corner and put on your dunce hat.

And why has the Senate version not included thus far the cuts in interest rates that the House version includes? Could it have anything to do with Sallie Mae getting to Mary Landrieu, who could be poised to become the "John Boehner" of the Democratic side of the aisle in the Senate? From the Times:

. . . . The Senate plans to follow later this month with its own bill that would cut subsidies by $18 billion and increase Pell grants but not cut interest rates for borrowers. Because of special language inserted in the budget, the legislation is not subject to a Senate filibuster and needs only a simple majority vote to pass.

The White House revealed its preference yesterday, stating that if the House bill were the one to win final approval, advisers would recommend that the president veto it for not directing enough new money to the Pell grants for low-income students.

The lenders say they are fighting for survival. “Our view is that the combination of these cuts could destabilize the program significantly,” said Kevin Bruns, executive director of America’s Student Loan Providers, a Washington group. “Some companies are going to exit.”

The sponsors of the bills were dismissive of the accusations that black students would suffer. Senator Edward M. Kennedy, Democrat of Massachusetts and chairman of the Education Committee, said, “If Sallie Mae really wants to help minority students, it should support our bill to provide the largest increase in student aid since the G.I. Bill.”

But some of the lobbying appears to be paying off. Senator Mary L. Landrieu, Democrat of Louisiana, wrote in May to the majority leader, Senator Harry Reid of Nevada, echoing loan industry talking points.

“Some of the changes being discussed could have a very harmful impact on students, parents, colleges and universities in Louisiana, particularly those students attending the many historically black colleges and universities in our state,” Ms. Landrieu wrote.

Ms. Landrieu’s press secretary, Adam Sharp, said her letter was prompted by a letter from the president of Dillard University, a historically black institution in New Orleans. Mr. Sharp added that the senator was still studying the legislation and had not taken a final position. A spokeswoman for Dillard, Karen Celestan, said lenders had not communicated with the university.

Another Democrat, Representative Lincoln Davis of Tennessee, wrote a letter to Speaker Nancy Pelosi of California, expressing worry that cuts to the guaranteed loan program could hurt students. Mr. Davis’s press secretary did not return calls for comment yesterday.

Supporters of the legislation say they are being forced to work harder than they expected to shore up support, given recent revelations of conflicts of interest in the student loan industry.

“It’s made us increasingly busy in explaining why some level of subsidy cuts is really appropriate,” said Luke Swarthout, of the U.S. Public Interest Research Group in Washington.

The unions have also swung into action to counter lenders’ efforts to make inroads with their members.

“The student loan program has been subject to abuses that harm, not help, students and their families,” Richard L. Trumka, the secretary-treasurer of the A.F.L.-C.I.O., wrote to national and state union officials and the organization’s executive council.

Harrison Wadsworth, special counsel to the Consumer Bankers Association, said the organization had contacted chambers of commerce, as well as unions. “We didn’t target union leaders,” Mr. Wadsworth said.

At the United Negro College Fund, Dr. Lomax said he had listened carefully to the arguments of Sallie Mae and was unconvinced. “I was not prepared to support their position,” Dr. Lomax said.

Bracey on the Latest Voucher Evidence

From Huffington Post:

VOUCHERS STRIKE OUT AGAIN

New York, Dayton, Washington, D. C., Cleveland, Milwaukee, Florida, and now Washington again. Kids who use publicly or privately funded vouchers to attend private schools don’t do any better in school than matched groups of public school children. You wonder how many at bats these guys are going to get. I guess when the club owners are people like George W. Bush, John Boehner, and James Leininger the answer is “infinite” (Leininger spent millions trying to influence voting in Texas to stack a legislature that would give him the vouchers he’s been chasing for 20 years. See Chapter 2, James Leininger, Sugar Daddy of the Religious Right in The Anatomy of Power: Texas and the Religious Right in 2006. Put the title in Google).

I guess if the names are George F. Will, Paul Peterson, or Joe Bast (Heartland Institute), the answer is also infinite simply due their infinite hatred for the National Education Association. Freud would have a field day with these guys.

The latest Washington debacle has to be especially disappointing to voucher proponents simply because it’s the latest. You’d think they would have learned something from all those earlier tryouts I named earlier.

Maggie Spellings was her usual inelegant self: “The report’s findings are in step with rigorous studies of other voucher programs which have not typically found impacts on student achievement in the first year. We know that parents are pleased with the success of the program in providing effective education alternatives.” And just how might you be defining “effective” Ms. Spellings?

Paul, when-the-going-gets-tough-the-Right-gets-Peterson, Peterson echoed Spellings “Kids lose ground when they change schools. Even if they may be in a better school, they’re not going to adjust right off the bat.” Well, Paul, live and learn, I guess. This is the first time I’ve heard you or any other voucher vulture invoke adjustment as an excuse for the poor showing.

And he and Maggie are wrong. Peterson’s own data show them wrong. Peterson claimed sizeable first year gains in Cleveland. Of course, he used fall-to-spring testing and had no control group so it wasn’t exactly a randomized field trial. Later, better studies by Kim Metcalf and a team from Indiana University found the public school kids starting out behind and catching up even though white students were overrepresented in the voucher groups.

In Peterson’s studies in Dayton and DC, Peterson got a “significant” effect in math—at the .10 level, a level not used by most researchers. By the second year, math had moved up to .05. Reading never showed any gain and by the third year everything had washed out.

Amit Paley’s article in the Washington Post says the Bush administration will attempt to expend vouchers nationwide in the reauthorization of No Child Left Behind. No doubt. Bush had them in there to start with, lost them to Kennedy, and was unable to get them reinserted despite six old college tries by Boehner.

But, hey, in a faith-based administration (see Ron Suskind, “Without a Doubt”, New York Times Magazine October 17, 2004) what’s a little negative data among prayer-mates?

Amit Paley, “Voucher Students Show Few Gains in First Year.” Washington Post, June 22, 2007, p. B1.

Cato Institute: Dump NCLB

It is a rare occasion that I find reason to post a study from the Cato Institute. Cato has their own extremist agenda, of course, for ending ANY federal participation in state or local school funding, but that fool notion does not detract from the points made here regarding the research that has been and continues to be ignored by Spellings, Miller, and Kennedy all.

From the Courier-Journal:

The looming expiration of the federal No Child Left Behind Act has prompted a flood of commission reports, studies and punditry.

Virtually all of those analyses have assumed that the law should and will be reauthorized, disagreeing only over how it should be revised. They have accepted the law's premises without argument: that government-imposed standards and bureaucratic "accountability" are effective mechanisms for improving American education and that Congress should be involved in their implementation.

Thorough review

In this paper, we put those preconceptions under a microscope and subject NCLB to a thorough review. We explore its effectiveness to date and ask whether its core principles are sound. We find that No Child Left Behind has been ineffective in achieving its intended goals, has had negative unintended consequences, is incompatible with policies that do work, is at the mercy of a political process that can only worsen its prospects, and is based on premises that are fundamentally flawed.

We further conclude that NCLB oversteps the federal government's constitutional limits -- treading on a responsibility that, by law and tradition, is reserved to the states and the people. We therefore recommend that NCLB not be reauthorized and that the federal government return to its constitutional bounds by ending its involvement in elementary and secondary education.

Virtually every study that has weighed in on the future of the No Child Left Behind Act has taken the law's underlying principles as given.

The voluminous "Beyond NCLB: Fulfilling the Promise to Our Nation's Children" report from the Aspen Institute's Commission on No Child Left Behind is typical, declaring that "Commission members . . . were united from the outset in [their] firm commitment to . . . harness the power of standards, accountability and increased student options."

Commission members' commitment to government standards and testing was not a product of their study but a foregone conclusion. Similarly, the "ESEA Reauthorization Policy Statement," published by the Council of Chief State School Officers, promises that "if we follow through," standards-based reform "has the potential to dramatically improve student achievement and meet our education goals."

No defense of, or evidence supporting, this claim is included in the statement. Despite the widespread assumption that government standards and accontability will prove effective, it is unwise to make policy decisions affecting tens of millions of children -- and costing tens of billions of dollars -- on the basis of preconceived, unscrutinized notions.

Assessing no child left behind

NCLB's supporters began declaring the law a success within a few years of its January 2002 passage. In July 2005, for instance, when the National Assessment of Educational Progress released its most recent Trends in Academic Progress report, then-chairman of the House Committee on Education and the Workforce John Boehner, R-Ohio, asserted that "[t]hrough No Child Left Behind, we made it a national priority to improve student achievement and close achievement gaps that have persisted between disadvantaged students and their peers. The culture of accountability is taking root in our nation's schools, and student achievement is on the rise."

In January 2006, Secretary of Education Margaret Spellings was similarly effusive:

"I am pleased to report that No Child Left Behind is working. The long-term Nation's Report Card results released this past summer showed elementary school student math and reading achievement at an all-time high and the achievement gap closing."

This sort of triumphalism has continued ever since, with Secretary Spellings in May 2007 even giving NCLB credit for improving scores on NAEP U.S. history and civics exams, despite the fact that NCLB does not address those subjects:

"For the past five years, No Child Left Behind (NCLB) has focused attention and support on helping students become stronger readers. The release today by The Nation's Report Card on U.S. History and Civics proves NCLB is working and preparing our children to succeed."

Policymakers like Boehner and Spellings, who helped to craft and pass NCLB, are not the only ones who have touted the law's supposed success. In its final report, released in February 2007, the Aspen Institute's NCLB commission rang a similarly positive note, claiming that "[t]here is growing evidence that NCLB is producing . . . improved student achievement. According to NAEP, scores in mathematics increased nationwide for fourth and eighth graders from 2003 to 2005. . . . In reading, the national average of fourth graders' scores improved from 2003 to 2005."

Consider, however, that NCLB was passed in January 2002, and fourth-grade reading scores did not in fact change at all between 2002 and 2005. The one-point uptick between 2003 and 2005 only offset a one-point downtick between 2002 and 2003. Furthermore, the Aspen commission neglects to mention that eighth-grade reading scores fell by two points after 2002. At least according to NAEP scores since NCLB's passage, it seems that the law has achieved nothing of consequence.

But post-passage scores don't tell us the whole story. To judge whether the law is working, we also have to look at preexisting trends in achievement. It is quite possible, for example, that math scores were already rising, and reading scores stagnating or falling, before the law was passed and that NCLB affected neither. To have any hope of isolating NCLB's actual effect on student achievement and test score gaps, we have to compare score trends before and after the law's passage.

According to the NAEP Long-Term Trends report, fourth- and eighth-grade math scores did improve between 1999 and 2004, as did fourth grade reading scores (eighth grade reading was flat). Attributing those results to NCLB is highly problematic, however, given that the law was only enacted in January 2002 and not fully implemented until the 2005-06 school year.

But suppose NCLB really did start transforming American education after just a year or two in existence. A rough idea of its effects could then be gleaned by looking at the standard NAEP mathematics and reading results (a data set that is separate from the Long-Term Trends report mentioned earlier). The news wouldn't be good: The trends in those results are virtually unchanged.

While both 4th- and 8th-grade math scores rose between 2003 and 2005 (the only period during which score changes can be reasonably attributed to NCLB), the rate of improvement actually slowed from that achieved between 2000 and 2003, a period before the law's effects would have been felt. In reading, the results were worse, with the period covered by NCLB seeing a score decline for 8th graders and stagnation for 4th graders, following an appreciable improvement between 2000 and 2002 (before the law's passage).

The analysis above is admittedly cursory, providing only tentative evidence of NCLB's effects. In June 2006 Harvard University's Civil Rights Project released a more rigorous review of NAEP score trends before and after passage of NCLB. After comparing the trends from 1990 all the way through 2005, the study's author, Jaekyung Lee, concluded that:

NCLB does not appear to have had a significant impact on improving reading or math achievement. Average achievement remains flat in reading and grows at the same pace in math as it did before NCLB was passed. In grade four math, there was a temporary improvement right after NCLB, but it was followed by a return to the pre-reform growth rate.

NCLB does not seem to have helped the nation and states significantly narrow the achievement gap. The racial and socioeconomic achievement gap in NAEP reading and math persists after NCLB. Despite some improvement in reducing the gap in math right after NCLB, the progress was not sustained.

NCLB's attempt to scale up the alleged success of states that already had test-driven accountability programs does not appear to have worked. It neither enhanced the earlier academic improvements seen in some of those states nor transferred them to other states.

Harvard study ignored

NCLB supporters have responded to the Harvard study by ignoring it. At the time of this writing, the only reference to Lee's study on the Department of Education's Web site was its routine entry in the department's database of education research papers (the ERIC database). And although the Aspen commission lists the Harvard study in its bibliography, the commission's report does not address -- indeed, does not even mention -- Jaekyung Lee's findings.

Interestingly, the Aspen commission released a background paper of its own, investigating post-NCLB test score gaps in seven states.

The paper did not compare score trends before and after the law's passage and was not nationally representative, so it is less useful than the Harvard study, but it is notable in that it offers little support for the commission's own positive views on the effects of NCLB. The paper finds that post-NCLB changes in ethnic and other achievement gaps have been "mixed." Some gaps have shrunk, some have grown larger, others haven't changed much at all.

Another recent report that bears on NCLB's academic effects was conducted by the Northwest Evaluation Association, a nonprofit test provider that works with 2,400 school districts. Using its database of test scores from more than 300,000 students, NWEA researchers compared how much students learned over the course of the 2003–04 school year with how much they learned in 2001–02. What the researchers found was that students learned less in a year after NCLB's passage than they did before it, a result that held true for every ethnic group analyzed and for both mathematics and reading.

The NWEA's results, it should be noted, were not necessarily nationally representative -- data from only 23 states were used -- and they do not conclusively prove that NCLB was responsible for the observed decline in student learning. However, they are a further piece of evidence that NCLB has not improved American education. Those results have also largely been ignored by the people who wish to reauthorize the law.

There is one last, important componen to NCLB that might offer evidence that the law is working: NCLB requires all states to create math and reading standards and to test student mastery of them. Perhaps the results of those assessments are promising. Indeed, many states have been reporting gains on state test scores. Most recently, a June 2007 report from the Center on Education Policy found that many states have seen overall state test score improvements and shrinking achievement gaps under NCLB, a finding that Secretary Spellings declared "confirms that No Child Left Behind has struck a chord of success with our nation's schools and students. . . We know that the law is working."

Despite the seemingly rosy findings when it comes to state test results, there is more bad news than good. For one thing, the CEP study identified huge holes and inconsistencies in state data, the result of most states' having altered their standards, tests, definitions of "proficiency," and other achievement measures since NCLB was passed. Indeed, there were so many holes in the data that CEP had usable pre- and post-NCLB data for only 13 states, and only enough information to conduct full analyses for seven.

And data holes are not the only problem. Several studies have found that students' score on state tests often greatly outstrip their performance on NAEP exams, suggesting that states make success on their own tests relatively easy to achieve, compared with the more rigorous NAEP. A June 2006 University of California, Berkeley, analysis comparing scores on state tests with those on NAEP for 12 states, for instance, concluded that "state results consistently exaggerate the percentage of fourth graders deemed proficient or above in reading and math -- for any given year and for reported rates of annual progress, compared with NAEP results."

More recently, the Institute of Education Sciences equated scores on state tests in schools that administered NAEP with those schools' NAEP results. (NAEP is based on representative sampling of schools and students rather than testing every student in every school.) This revealed that most states' "proficient" levels are equivalent to NAEP's "basic"designation. That is, except in fourth grade reading, where most state proficiency levels are actually below NAEP's basic level.

Taking all these findings together, NCLB appears to have done little good, despite rhetoric from NCLB supporters to the contrary.

Indeed, if anything, there is appreciable evidence that NCLB may have slowed or even partly reversed gains achieved before its passage.

Boehner, Spellings, and Student Loans at 20 Percent

Written into the bankruptcy bill of 2005--the No Loan Shark Left Behind Act--was a provision to make it practically impossible to default on private loans taken out by students to pay for a college education. At the time Sallie Mae's sugar daddy, John Boehner, was in tall cotton, telling bankers they could rest easy in his "trusted hands." Since then the "representative from Sallie Mae," as he is known by fellow members on the House Committee for Education and the Workforce, has worked diligently to weaken the federal guaranteed student loan program, which caps interest rates on loans at 6.8%.

All the while, Spellings looked the other way as college student databases were mined by mercenaries planted at ED for that very purpose. And as she did zero oversight of the pillaging, preferring to concentrate on paying out unearned hundreds of millions to finnagling loan companies like Nelnet, Sallie Mae was paying off college officers to ditch the guaranteed federal loan programs offered to students. If it were not for Cuomo's insistent digging, we would still be in the dark dark on this whole sleazy travesty.

Now as this New York Times story points out, we are beginning to assess the collateral damage, with graduating seniors owing up to a hundred thousand of private loan debt, some with a 20% ceiling. Of course, the highest interest rates are preserved for those least able to pay. A clip:

WASHINGTON — As the first in her immigrant family to attend college, Lucia DiPoi said she had few clues about financing her college education. So when financial aid and low-interest government loans did not stretch far enough, Ms. DiPoi applied for $49,000 in private loans, too. “How bad could it be?” she recalls thinking.

When Ms. DiPoi graduated from Tufts University in Boston, she found out. With interest, her private loans had reached $65,000 and she owed an additional $19,000 in federal loans. Her monthly tab is $900, with interest rates topping 13 percent on the private loans.

Ms. DiPoi, now 24, quickly gave up her dream to work in an overseas refugee camp. The pay, she said, “would have been enough for me but not for Sallie Mae,” her lender.

The regulations that the federal Education Department proposed this month to crack down on payments by lenders to universities and their officials were designed to end conflicts of interest that could point students to particular lenders.

But they do nothing to address a problem that many education officials say may have greater consequences — more students relying on private loans, which are so unregulated that Attorney General Andrew M. Cuomo of New York recently called them the Wild West of lending.

As college tuition has soared past the stagnant limits on federal aid, private loans have become the fastest-growing sector of the student finance market, more than tripling over five years to $17.3 billion in the 2005-06 school year, according to the College Board.

Unlike federal loans, whose interest rates are capped by law — now at 6.8 percent — these loans carry variable rates that can reach 20 percent, like credit cards. Mr. Cuomo and Congress are now investigating how lenders set those rates.

And while federal loans come with safeguards against students’ overextending themselves, private loans have no such limits. Students are piling up debts as high as $100,000.

Banks and lenders face negligible risk from allowing students to take out large sums. In the federal overhaul of the bankruptcy law in 2005, lenders won a provision that makes it virtually impossible to discharge private student loans in bankruptcy. Previously such provisions had only applied to federal loans, as a way to protect the taxpayer against defaulting by students. . . .

EduCap, Inc., Student Loans, and Caribbean "Summits"

John Boehner is a lending rep's Rep who makes Tom DeLay look like a paragon of virtue. With government student loan funds slashed last spring, Boehner's primary constituency, the private student loan shark companies, have moved in big time. Their wine-and-dine strategy for corrupting university officials, of course, is the same one used to further corrupt the Congress, many of whose members will be picking up the pieces (and their paychecks) on K Street following November 7.

The light of day occasionally cast by the media is enough, however, to send these blood suckers scurrying back under their rocks. Example: today's story in the Times about EduCap, Inc.'s cancelled field trip planned for university officials and their spouses to warm and sunny Nevis during the cold and dark month of February. As the story goes, EduCap, Inc. has scored billions as a result of federal rules and regs they have essentially been allowed to write, and now they want to share some of that wealth with those university officials who can send more customers desperate for any way to fund their college educations--even if it means coming out of college swamped with debt.

Room rate at the Nevis Four Seasons? $655 per night:

It turns out there probably will not be much talk about education on the Caribbean island of Nevis this February. The student loan company that invited university officials and their spouses to an expenses-paid education summit meeting there has canceled the event.

George Pappas, a senior vice president of the loan company, EduCap Inc., had said the purpose of the conference, which was to be held Feb. 2 to 5 at the Four Seasons Resort, was to discuss education, not loans.

But some financial aid administrators have said the conference was EduCap’s way of wooing university officials who could steer student borrowers their way, for example, by putting them on so-called preferred-lender lists.

Students rely heavily on the lists when choosing a private lender, and loan companies have come up with a range of inducements to persuade officials to steer borrowers their way.

In a letter on Wednesday to people who planned to attend the conference, Mr. Pappas said the company was canceling the event “in light of recent inaccurate reports in the media regarding the financial aid community and the unfortunate perception these reports have created.”

The letter said more than 80 percent of attendees were “not members of the financial aid community.”

“Considerable confusion and misinformation exist about the purpose of the summit,” Mr. Pappas wrote, adding: “The goal of the conference was to foster an informed, thoughtful discussion about creating an educated citizenry.”

Michael Dannenberg, director of education policy at the New America Foundation, a public policy institute in Washington, called the cancellation “but a small victory for the integrity of financial aid,” saying, “larger conflicts of interest remain.”

EduCap is a nonprofit company in the Washington area that has reaped billions of dollars in the lucrative student loan business.

The company was to pay for airfare, the hotel stay and dining for each conference participant and a guest.

A standard room at the Four Seasons on the planned February dates cost $655 a night, not including “taxes, service charges and coastal protection levy,” according to the hotel’s Web site.

Boehner's Buddies Banking on Bond Market

House Majority Leader John Boehner's friends at Nelnet and other lending institutions (see story from The New Republic for background) are banking on Wall Street to bail them out now that most Republicans have flip flopped on their support for that juicy 9.5% deal on student loans.

The OIG report on the student loan scandal at ED, (not to be confused with the Reading First scandal at ED), could bring the gravy train for private lenders to a screeching halt. The problem is the regulations being imposed by ED could also bring the bond market to a halt and even higher costs for financing education.

Dire warnings about the future stability of the bond market, reported in this Dow Jones story, have already led 14 senators to write a letter to Spellings implying any "retroactive" applications of the regulations could "unsettle the market for student loan-backed tax-exempt bonds."

Bond holders, issuers and underwriters are warning that U.S. Department of Education regulations issued in September could unsettle the market for student loan-backed tax-exempt bonds.

The regulations are intended to implement student loan provisions in two recent pieces of legislation, the Taxpayer-Teacher Protection Act of 2004 and the Higher Education Reconciliation Act of 2005. But while Congress intended the changes in those bills to be prospective, industry groups and their allies in Congress say the department's regulations appear to be retroactive.

"Such a retroactive change would harm existing bondholders who made investment decisions based on the good faith representations of underwriters and dealers," The Bond Market Association wrote in a letter to Education Secretary Margaret Spellings last month.

Harmful education policies and incompetence at ED that undermine teachers and students is one thing, but the prospect of investors losing confidence in the bond market is another.

Student Loan Interest Giveaway at ED

This past Friday afternoon news dump included, yet, another Office of Inspector General (OIG) Report on ED corruption, this one outlining another massive jettisoning of federal tax dollars to line the pockets, this time, of the student loan corporation, Nelnet, which, by the way, is tied for # 11 on John Boehner's list of political contributors.

The amount in question is $278,000,000 paid out so far to Nelnet in interest that it has "earned" from a crooked financial maneuver that ED continues to allow. Even though ED was allowing this practice during Paige's rein at ED (despite a report from the GAO in 2004), it was after Spelling arrived to take charge that the her own OIG's first report was issued in May 2005, calling for ED to halt the overpayment to a small New Mexico lender which had abused its way to an unearned $36 million in interest payments.

Instead of taking action, however, Spellings ignored the OIG Report, even though she was warned by the OIG and others that the New Mexico deal was small potatoes compared to what was happening among corporate providers of student loans. Still she ignored the OIG recommendations. Now we find these conclusions in the most recent OIG Report, included in the Friday news dump:

We estimate that Nelnet—

• Was improperly paid about $278 million in special allowance from the quarter ended March 31, 2003, through the quarter ended June 30, 2005; and

• Could be improperly paid about $882 million in special allowance after the quarter ended June 30, 2005, if Nelnet’s billings are not corrected.

So while Spellings was being warned by OIG in May 2005, Nelnet had already carried off over a quarter-billion dollars since 2003. Since June 2005, Nelnet has pocketed another $178,000,000 as a result of Spellings' inaction. If she waits until New Year's to stop the thievery, Nelnet will have pocketed another $36,000,000. If she waits until Spring, another $34,000,000 on top of that. In short, Spellings's inaction is costing $11-12 million a month.

Of course, Spellings' media stooge, Ben Feller, does not mention these facts in the official story, the only one that has been filed except a pitiful blip by Reuters. Instead, Feller has this:

Education Secretary Margaret Spellings will review the report and Nelnet's response before deciding how to proceed, said spokeswoman Katherine McLane.

"Secretary Spellings takes protection of American taxpayers very seriously and is concerned about the issues raised in the inspector general's report," McLane said.

Concern? She was not concerned in May of 2005 when her own IG gave her the first recommendation to stop this practice, an authority that the GAO had already assured her that she had. Wonder why? Could it have anything to do with John Boehner and Buck McCown and the other corrupt hacks who put her where she is today?

Here is a bit of how the scam works from a much more agressive Feller piece in 2005. Wonder what happened to him:

A Government Accountability Office report last year found that subsidy payments skyrocketed from about $209 million in 2001 to more than $600 million as of June 2004. The government said it ultimately spent about $1 billion on the payments last year.

The GAO attributed much of that increase to a drop in interest rates. But it also said the growth was tied to a number of financial maneuvers lenders used to get the 9.5 percent return -- including a method denounced by the IG. Under that arrangement, the lender issued a "refunding bond" to pay off the original, pre-1993 bond and also to finance new loans that it asserted were also eligible for the special subsidies. Because those refunding bonds mature later than the original ones, they enabled lenders to continue billing the government for the subsidies.

The GAO report, issued in September [2004], called the subsidies "unnecessary" and said the Education Department had the authority to end them immediately.