Frequently the target of angry borrowers who say the Education Department does a bad job managing the student loans of tens of millions of people, Education Secretary Betsy DeVos yesterday said that the government’s $1.5 trillion student loan portfolio should be someone else’s problem, the New York Times reported. Calling student loan financing an “untamed beast,” DeVos said it should be spun off into its own federal agency. Her department’s Federal Student Aid office is battered by “the ever-changing political whims of Washington,” she said, and “cannot fulfill its mission” in its current form. The Department of Education has for years drawn criticism from government auditors and lawmakers of both parties for its slipshod management of the vendors it hires to service its ballooning portfolio of loans. But DeVos has faced especially intense disapproval from borrowers and their advocates. During her tenure, a program to relieve the debts of teachers, police officers and others who work in public-service jobs has become a bureaucratic disaster, rejecting nearly all who apply. The department allowed a troubled for-profit chain, Dream Center Education Holdings, to collect millions of dollars in federal funds that it was ineligible to receive before it collapsed this year. And a federal judge recently held DeVos in contempt of court for illegally collecting on the debts of thousands of students defrauded by another, defunct for-profit chain of colleges. (In a court filing on Monday, the department said it had incorrectly tried to bill 45,000 borrowers, nearly three times the number it had previously acknowledged.) DeVos said yesterday that a separate agency, governed by an “expert and apolitical” board, would be better able to run what has become, in effect, one of America’s biggest banks.
