Oopsie! Department of Education cops to massive math error on student loans

What a confidence builder, eh? This looks more like a confidence game, though, in support of the Obama administration’s war on for-profit schools. The Wall Street Journal’s editorial board blasts the Department of Education for waiting months to disclose that they had made a huge error on student-loan defaults, even while issuing regulations that hammered for-profit schools on the basis of that error:


In early January the department disclosed that it had discovered a “coding error” that incorrectly computed College Scorecard repayment rates—that is, the percentage of borrowers who haven’t defaulted and have repaid at least one dollar of their loan principal. The department says the error “led to the undercounting of some borrowers who had not reduced their loan balances by at least one dollar.”

The department played down the mistake, but the new average three-year repayment rate has declined by 20 percentage points to 46%. This is huge. It means that fewer than half of undergraduate borrowers at the average college are paying down their debt.

Prior to this admission, the Department of Education had claimed that only a third of all student loans had never begun repayment — but that the rate soared to over half at for-profit schools. Based on that calculation, DoEd finalized a rule that required those schools to post a warning in all of their promotional materials to the effect that their students tended to be deadbeats. State-based and non-profit private colleges are exempted from those disclosures, based on the bad math performed by the DoEd.

However, it wasn’t just bad math, as the WSJ’s editorial board points out:

Marc Jerome, president of for-profit Monroe College in the Bronx, discovered the Scorecard rate inflation last August. In several emails to Education officials, he urged the department to hold off on finalizing the regulation. If the regulation were applied evenly, a large number of nonprofit and public institutions would fail to meet the standard. But then the justification for the department’s selective regulation of for-profits would vanish.

The department finalized the regulation in October anyway, perhaps anticipating a Hillary Clinton victory that would allow the repayment inflation game to keep going. Yet now it’s taking credit for discovering and fixing the Scorecard error that likely would have been uncovered by the new Trump Administration.


Call it … bad math with a purpose. Had it just been a routine “coding error,” and without any malice, then Jerrome’s repeated entreaties pointing out the problem would have resulted in a correction and a new report. This looks more like a deliberate attempt to cook the books in order to blame student-loan defaults on poor career performance for those who matriculate from for-profit schools. Instead, we now know that long-term performance, as measured by student-loan defaults, looks about the same between the for-profit and not-for-profit education centers. That knowledge would have undercut the regulatory hostility toward the former for almost the entirety of the Obama administration, which is why the DoEd only revealed it on Barack Obama’s entry into retirement.

Betsy DeVos should make investigating this a top priority after her confirmation as Education Secretary, which will come soon. Democrats continue to demagogue her, but they’re doing a terrible job of it, as the Washington Post’s Glenn Kessler discovered when looking into attacks by Maxine Waters on DeVos. Waters declared at the Women’s March Saturday that DeVos had “never seen the inside of a classroom,” which Kessler called “ridiculous”:

DeVos has been attacked for not having much of a connection to public schools. She did not attend public schools, and neither did her children. They attended privately funded Christian schools, and DeVos has advocated expanding charter schools.

But DeVos has also been involved in the Grand Rapids Public School system in Michigan. “I’ve worked as an in-school mentor for students in the Grand Rapids Public Schools, and have had the privilege of interacting with students and their families and teachers in ways that have changed my life and my perspective about education forever,” she said in her opening statement at the Senate hearing on her nomination.

Indeed, Teresa Weatherall Neal, superintendent of the Grand Rapids Public School district, has praised the selection of DeVos. “I’m really excited for the children across the nation,” Neal told MLive.com. “She has been a wonderful supporter of GRPS and our transition plan. She knows education. She knows what it is going to take in order for our kids to be helped.” …

DeVos sparked questions about her knowledge of education issues during the contentious hearing on her nomination. But Waters goes too far when she asserts, without evidence, that DeVos has never seen the inside of a classroom. Maybe Waters believes that private schools don’t count, but it’s clear that DeVos has seen the inside of public-school classrooms, as well. If she was trying to say DeVos had never been an educator, she still went too far. This kind of over-the-top rhetoric earns Four Pinocchios.


Can we also add a dunce cap to the Department of Education for not being able to do basic algebra?

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