The Puzzling Reason Why Carly Fiorina Wants To Shrink The U.S. Department Of Education
Education Reporter, Think Progress
Carly Fiorina, former CEO of Hewlett-Packard and Republican presidential hopeful, said that one “metric of success” would be to make the U.S. Department of Education a “whole lot smaller.” She made the remarks at an education summit hosted by The Seventy Four, an education news website, and moderated by its founder Campbell Brown. Fiorina said she would like to see the department justify every single part of its funding every year:
What we need to do is have zero-based budgeting in the federal government. That’s a fancy word for saying every single department has to justify every single dollar every single year. We don’t know what the department of education does anymore. We don’t know what they’re doing. We don’t know what they’re spending money on.
In fact, we do know what the U.S. Department of Education is doing. The department does release reports on where its federal dollars went and provides organizational charts, a list of its main goals that year, such as ensuring high schools with persistently low graduation rates decrease by 5 percent annually by September 30, and comparisons of liabilities, assets, and net position to previous fiscal years. You can read the 160-page report on the 2014-2015 fiscal year here.
As a broad overview, the department of education provided $27.13 billion in grants and 467 billion in Pell for discretionary appropriations this year, which includes Pell Grant funding, provides oversight to make sure the states spend federal money in the way it is intended to be spent, uses financial incentives to ensure schools don’t discriminate based on gender through Title IX, and collects national education data.
One of the department’s key objectives is to serve as a check on education inequality. In the 1970s, there was a realization that Title I money would not be spent as intended if there were no federal oversight over states’ education spending. The department also oversees dubious practices in the for-profit college industry. The department investigated Corinthian Colleges and fined it $30 million after discovering that it misrepresented its job placement data.
This isn’t the first time Fiorina has misrepresented what the department does. At an event at the Iowa State Fair, where Fiorina visited the Butter Cow, Fiorina told the Des Moines Register:
They have increased the cost of a four-year college education by forcing a whole set of very complicated accreditation procedures on a whole set of colleges. Those are very expensive to adhere to. They also have contributed to high cost of college education by driving out certain choices for higher education like for-profit universities for example. They’ve also created the problem by nationalizing student loan industry. It used to be competitive industry. It isn’t anymore. The federal government basically owns that industry. They decide what interest rates should be, and say, ‘Aw it should be between 4.5 and 6 percent,’ meanwhile the government paying 1.5 and 3 percent interest on their own debt kind of sounds like a racket to me.
The student loan industry is not nationalized, but the department has made changes in regards to student loans a few years ago, which may be what Fiorina is referring to. The Affordable Care Act contained a reconciliation bill that meant all student loans would originate with the federal government compared to 2010, when 55 percent of those loans originated with banks. The federal government used to pay the banks more than the cost of the loans, which meant the change would actually save taxpayer money.
It’s important to remember that the private student loan industry is not hurting. According to a 2014 report released by the Institute for College Access and Success, an independent nonprofit organization, the volume of private loans has been increasing since 2010-11, though it fell quite hard during the recession. In terms of competition with federal loans, private loans have variable interest rates and don’t usually offer income-based repayment plans as the federal government does. According to the report, variable and fixed rates are highest for students who can least afford them and are can be as high as 13 percent compared to the Undergraduate Stafford loan rate, which is 4.66 percent. It’s also more common for students to turn to private loans when attending the pricier for-profit universities Fiorina touts. For-profit colleges, with their higher student loan debt and poor completion rates, have proven to be especially burdensome to black and Hispanic students, who are more likely to attend for-profit colleges, according to a 2014 report from The Center for Responsible Lending.
Fiorina isn’t the only Republican presidential candidate interested in loosening rules on accreditation for for-profit universities. Florida Sen. Marco Rubio and New Jersey Gov. Chris Christie have also mentioned loosening accreditation rules, which are already very loose. According to a report by The Huffington Post, executives from for-profit colleges often sit on the boards of accrediting bodies, none of the five major for-profit companies had their accreditation revoked in the past 10 years and fraudulent job placement rate data went unnoticed.
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This has been reposted from Think Progress.
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Image by Gage Skidmore on Flickr.
