June 05, 2017

Warren Urges HELP Committee to Hold Hearing, Following Abrupt Resignation of Office of Federal Student Aid Chief

Text of the letter available here (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.) today sent a letter to U.S. Senator Lamar Alexander, Chairman of the Committee on Health, Education, Labor and Pensions (HELP), urging the HELP committee to hold a hearing on the state of the Office of Federal Student Aid (FSA) following the abrupt resignation of the former Chief Operating Officer, James Runcie, and on his appointed successor.

Mr. Runcie recently resigned after nearly six years in his role as COO. In his resignation letter, Mr. Runcie reportedly cited political meddling and grave mismanagement of the federal aid programs by the new political leadership at the Department of Education under Secretary Betsy DeVos as his reason for leaving.

"The issues and concerns raised by Mr. Runcie are serious matters.  FSA manages a $1.3 trillion direct and guaranteed student loan portfolio with debt held by over 40 million Americans.   The size of this portfolio has grown dramatically since Mr. Runcie took office-becoming an even more critical lifeline for students as the cost of college rapidly outstrips inflation.  Americans cannot afford for the office to be mismanaged or under-resourced," wrote Senator Warren.

Senator Warren raises a number of concerns over Mr. Runcie's reported claims that some FSA projects, including implementing year-round Pell Grants and processing a backlog of borrower defense loan discharge applications for defrauded students, are not receiving sufficient resources. She also questions Secretary DeVos' lack of response to Mr. Runcie when he asked for a waiver to hire additional staff.

"Mr. Runcie said he asked Secretary DeVos for a waiver to hire additional staff to help manage these critically important projects and this growing volume of work, but did not receive a response," wrote Senator Warren. "This revelation is shocking, considering that Congress explicitly gave FSA flexibility and independence regarding hiring and staffing authority."

In the letter, Senator Warren states that although the Chief Operating Officer of FSA is not subject to Senate confirmation, the dramatic growth in the federal loan program, the complete transition to direct lending, and allegations of political meddling and grave mismanagement of the FSA program warrant Congressional oversight of the position.

"It is critical that Secretary DeVos rapidly choose a highly qualified FSA chief who isn't affiliated with the profit-hungry student loan industry or predatory colleges, and who will put the interests of students and families first in every decision," wrote Senator Warren.

This letter is the latest in an ongoing oversight effort to hold Secretary DeVos accountable for putting profits ahead of students. Follow more DeVos Watch developments here.