When a federal judge ruled in favor of the Biden administration’s deal to pay off $6 billion in student debt, the progressive activists representing student borrowers hailed the news.
“This decision delivers a massive, long-overdue victory for our clients and validates the fact that this settlement is on solid legal ground,” said Eileen Connor, president and director of the Project on Predatory Student Lending (PPSL).
And the PPSL should be happy, given that one of its lead lawyers is now deputy general counsel for the Biden administration’s Education Department that agreed to the deal.
How can one person be the attorney for both sides of a billion-dollar settlement? That is just one of the many strange twists in this story of progressive political insiders, taxpayer-funded bailouts, and allegations of insider trading.
Last June, the Department of Education (DOE) agreed to automatically forgive federal student loans for some 200,000 students from 151 colleges, mostly for-profit and career colleges. The agency used the little-known “borrower defense to repayment” (BDR) regulation allowing students to claim they were misled when they took out the loans.
“Since day one, the Biden-Harris Administration has worked to address longstanding issues relating to the borrower defense process,” said Education Secretary Miguel Cardona at the time. “We are pleased to have worked with plaintiffs to reach an agreement that will deliver billions of dollars of automatic relief to approximately 200,000 borrowers.”
One of Cardona’s employees was Deputy General Counsel Toby Merrill, who helped oversee the settlement. Merrill’s name also appears on the list of plaintiffs in the Sweet v. Cardona settlement. That’s because Merrill founded and directed the PPSL that filed the lawsuit against the agency. Three months after the filing, the Biden administration hired her. Less than a year after that, the Education Department agreed to a $6 billion settlement with her former organization.
Not surprisingly, that relationship has raised ethical eyebrows from consumer advocates.
“This settlement proposal is a winning lottery ticket for tens of thousands of students who just got the taxpayer to pick up the tab for their tuition, and grifting lawyers and liberal activists who continue to line their pockets by gaming higher education at the DOE and in court,” said Gerard Scimeca with Consumer Action for a Strong Economy, a free-market-oriented consumer advocacy organization.
The Career Education Colleges and Universities (CECU) organization also opposed the settlement, arguing such a sweeping settlement would damage the reputation of all for-profit colleges, the vast majority of which played by the rules and helped students enter the workforce.
“Schools began to see the impact as soon as the agreement came to light,” the CECU’s Nicolas Kent told InsideSources. “We had calls from schools saying that students are asking about backing out [of their commitment to the institution, even though the settlement agreement doesn’t mean there was any wrongdoing [by a school on the settlement agreement list].”
But is damaging the entire career college industry one of the Biden administration’s goals?
Industry advocates note that the PPSL was a progressive project of the Legal Services Center of Harvard Law School, one that targeted its schools. “The Project represents low-income student loan borrowers in litigation against for-profit colleges and against the policies that enable them,” says an Education Department press release announcing Merrill’s hire in July 2021.
While at Harvard, Merrill and the PPSL collaborated with the Debt Collective to “tackle the for-profit college industry.”
The Debt Collective, which credits Merrill for providing the legal underpinnings of its work, was founded by activists who met during the Occupy Wall Street protests. “The group’s goal is to get all private and federal student loans canceled and to make public college free,” reported CNBC.
Last June, the ranking members of the House Committee on Education and Labor and Senate Committee on Health, Education, Labor, and Pensions requested information about a private meeting between the Debt Collective and Federal Student Aid Chief Operating Officer Richard Cordray “to discuss a memo the organization provided on closing private institutions of higher education without congressional authorization.”
“For-profit institutions educate over half of the truck drivers in this country, who are critical partners to addressing supply chain shortages, and these same for-profit institutions graduate 44 percent of all nurses of color, who served on the frontlines of the COVID-19 pandemic,” Virginia Republicans Rep. Virginia Foxx and Sen. Richard Burr wrote. “The evidence that the Department is following the recommendations of an outside memo to dismantle career colleges is deeply concerning. The insinuation that the Department believes it has the authority to take these grievous actions without Congressional approval is downright alarming.”
It appears the Biden administration is following the same policy put in place by the Obama administration’s Robert Shireman, an outspoken opponent of for-profit education. Shireman “waged ideological war” on the schools, according to The Wall Street Journal, with the help of allies James Kvaal and Ben Miller.
Shireman is the founder and former president of The Institute for College Access and Success (TICAS), an organization that lobbies Washington over education policy. Like Shireman, Kvaal served as TICAS president. The two worked together in the Clinton administration, and when Shireman left his job as Deputy Undersecretary of Education in the Obama administration, he was replaced by Jim Kvaal.
As part of the Obama administration, Shireman tried to push through a “gainful employment” rule targeting career colleges that was eventually thrown out by the federal courts. Miller has written articles about for-profit education with Shireman and considers himself a protege. And both Shireman and Miller recruited students to file BDR claims for the lawsuit.
Shireman was forced to leave the DOE after he “was caught during the Obama administration playing footsie with a short-seller betting against for-profit colleges,” according to The Wall Street Journal.
Today, Miller is a senior advisor to the DOE’s Chief of Staff and Kvaal serves as Under Secretary of Education.
You don’t have to be paranoid to see the potential problem with the $6 billion settlement and how it was handled, said Scimeca.
“This type of settlement has long been part of the left’s endgame in their longstanding ideological war against career-oriented, for-profit colleges. Their entire strategy is based on knowing that the claims of fraud from the tens of thousands of plaintiffs they recruited — whether true or not — could never be adjudicated by our wholly incompetent DOE.”
Randall Bloomquist is a veteran journalist who writes about business and industry for InsideSources.
So basically, we’re allowing them to not pay what they haven’t been paying. And that’s supposed to make a big difference in their lives. They’re not being handed $10,000, it’s not being given as a tax credit, a deduction or a refund. I’m sure there will be no annotation of it on their tax returns that could interfere with other welfare programs that could make them ineligible for. And there is talk that those who paid all or something on their student loan balance will be refunded that amount up to $10,000. Why not?
Why stop at student loans? Mortgage and credit card debt should be considered since the lunatics running the asylum can’t differentiate what a legal binding contract and defaulting on a loan actually means.
The representatives of the people are supposed to control the “purse” of government. Biden is acting like a dictator.
It should not came as a surprise that a Marxist government would try to destroy anything they do not have control of.
Whether or not the bailout goes forward there is something rotten in school finance and only full audits and a professional assessment can fix it. Fifty bucks a month in perpetuity as an interim fix
Completely illegal and those cases can be thrown out, if I remember what other courts have done in the past, just because he did that.
I was stationed in many third world countries in the 80’s & 90’s, corruption was always there. Upon my return to the States, I began to see that same corruption ( the Clinton years). The corruption I am seeing now, is beyond anything I ever saw overseas. Federally Bribed Investigations bureau, Investigate Republican Service, the list goes on. We need an entire purge of the politically elite!
Isn’t using both sides against the middle standard procedure for politicians? Money is all that matters and after all, they are two-faced and speak with forked tongues.
There is nothing “…strange…” about corrupt people being hired by their political comrades in governmental agencies.
I thought the House of Representatives controlled the purse. The whole damn thing was done without taxpayers’ approval.
Pardon me if I don’t appear surprised. Another round of socialists hating anything for profit once again on the backs of those who attended these schools, nurses, truck drivers, computer techs and so many more.
Who do they claim misled them? What was it they did not understand? This is buying votes with taxpayers’ money.
Toby Merrill should be disbarred!! It’s unethical for any attorney to represent both sides in legal proceedings. She should have declined the offer to work for the Biden administration because of the position it’s placed her in.
Why is this site not allowing me to register my votes on comments?
Why was it only after I posted my complaint that I was able to register votes on comments?
A Democrat who is a crook? How surprising is that? (TFIC)
Well the dates in the article are not correct. The filing began in June of 2019. So I guess we build about two less nuclear submarines this year to help 200k struggling former students. oh the horror that we live through in this country. keep in mind these were settled against for profit schools many that went out of buisness because of there desire to defraud students. hopefully you have access to court documents and understand litigation prior to making comments.