WASHINGTON - Sen. Elizabeth Warren, D-Mass., is asking Education Secretary Betsy DeVos to explain the hiring of two officials with ties to the for-profit-college industry, questioning their roles and potential conflicts of interest.
Warren, a member of the Senate Committee on Health, Education, Labor and Pensions, sent a letter to DeVos on Friday raising concerns about Robert Eitel and Taylor Hansen. Eitel, as first reported in The New York Times, is a top lawyer at Bridgepoint Education, an operator of for-profit colleges, who has taken unpaid leave to serve as a special assistant to DeVos. Hansen, a former lobbyist at the Association of Private Sector Colleges and Universities (now called Career Education Colleges and Universities), told ProPublica that he was hired on a temporary basis at the department.
Their appointments come as the Education Department has extended the deadline for career schools and community colleges that provide vocational training to submit appeals under the gainful employment rule. The controversial regulation threatens to withhold federal financial aid from institutions whose graduates are unable to earn enough to repay their student loans.
For-profit colleges have lobbied against the rule for years, arguing that it unfairly targets the sector and would ultimately hurt the low-income students they educate. Their protests fell on deaf ears during the Obama administration, but the Trump administration and congressional Republicans have taken up the cause with promises to roll back the rule.
In her letter, Warren questions the timing of the extension and Hansen’s hiring because he lobbied against the gainful rule, according to the Senate Office of Public Records Lobbying Disclosure databases. She said his ‘‘recent employment history clearly calls into question his impartiality in dealing with higher education issues at the Department of Education, and raises alarming conflicts of interest concerns.’’
Hansen, she added, also may have other conflicts of interest related to the student loan program because his father, Bill Hansen, is president of United Student Aid Funds, a company that collects education debt. The company, now known as Strada Education Network, is suing the Education Department for barring it from charging people in default fees of up to 16 percent of the principal and accrued interest owed on the loans. The lawsuit is now moot because the department revoked its own guidance on the issue last week.
Education Department officials did not immediately respond to requests for comment on the letter or agency rules regarding employee conflicts of interest. Trump signed an executive order in January that requires political appointees to abstain from involvement in matters related to their former employer or clients, including regulations and contracts, for two years.
But Warren said the appointment of Hansen and Eitel, coupled with recent announcements at the education agency, ‘‘call into question whether the Department of Education is adequately complying’’ with Trump’s order.
Eitel worked at Bridgepoint, owner of Ashford University and the University of the Rockies, as the company battled multiple government investigations, including one that resulted in a $32 million settlement with the Consumer Financial Protection Bureau. The watchdog agency made the company refund and discharge $24 million in debt that students accumulated through an in-house loan program that allegedly misled borrowers about the total cost of the loans.
In February, the Education Department’s inspector general determined that Bridgepoint owes the department a $300,000 fine for miscalculating the refund of federal aid provided to Ashford students, according to a regulatory filing. The company can appeal the inspector general’s audit directly to DeVos.
‘‘Given both Mr. Hansen’s and and Mr. Eitel’s extensive -- and recent -- activity as lobbyists with or compliance officers for for-profit colleges, I have concerns about whether they would be able to advise you in an objective fashion on higher education matters,’’ Warren wrote DeVos.
Publicly traded for-profit colleges have butted heads with state and federal regulators over allegations of steering students into high-cost loans, misleading consumers about their programs and aggressive marketing tactics. The scrutiny, coupled with government lawsuits and depressed student enrollment, has placed tremendous pressure on the sector. But the election of Trump, who campaigned on reducing regulation across industries, has lifted shares of for-profit colleges as Wall Street anticipates the weakening of federal rules and oversight of the industry.