Friday, August 14, 2009
Part II of the Resurrection of the Dept. of Ed. G-man and America's Collective Trauma
The archival dust from the binary system operating behind this clean-looking computer has settled. With the dust particles settling into their cozy crevices, additional clarity about Oberg's heroism as a civil servant at the DOE emerges.
On a side note, but nevertheless important, one reader pointed out that the story I've told so far skewers Republicans, and therefore might imply that I believe the Democrats are not involved in this mess. That's far from the case. This student lending crisis is a systemic problem. Its center, sadly, reveals the darker side of politics, universities, and very powerful lobbying groups. All groups know how to mobilize with great efficiency. Operating around the vortex of money and power, their mobilization efforts have sucked in a slew of unfortunate victims: working- and middle-class students and their families. Those who graduate now know that they are a new class - the educated indentured class.
Luckily, Oberg was not sucked into the structure of misinformation. As a result of seeing things clearly, he uncovered a gaping hole that allowed lenders to take millions of dollars in subsidies and line their own pockets.
Case in point: Sallie Mae's CEO, Albert Lord, made a pretty penny. Here, for example, Jeffrey H. Birnbaum wrote an article in the Washington Post in 2007 and rhetorically asked, "How much wealth [did Lord acquire as a CEO]?"
Answer:" Lord, 61, has been building his own private 18-hole golf course on 244 acres in Anne Arundel County, an hour's drive from downtown Washington. He was well-heeled enough to spearhead a serious-but-unsuccessful bid to purchase the District's new professional baseball team, the Nationals."
(Question is: did he finish that private golf course and should he acquire more land in Anne Arundel County? 244 acres - isn't that a small spread? I worry that he might not be making enough money to survive. I also worry that Lord might be suffering from his own personal trauma, and has frantically been building things for leisure to escape the nasty skeletons in his own childhood closet).
The dutiful civil servant, Oberg, worried about the loophole(s). He couldn't stop worrying about it. The slumber induced by collective trauma did not make Oberg drowsy. There's also another issue to digest. It's related to the 9.5% return on loans. however, this type of awakening and the lessons we are all learning about this corrupted system means that I will provide this piece of the story later. If you want to read about it now and are prepared, go to the original blog I'm referencing here. Rest assured, the 9.5% issue will be covered.
Returning to the hula hoops loopholes that the lenders slithered and continue to slither through, it turns out that Nelnet benefited too. And so the treasury was feeding Nelnet and Sallie Mae with millions and millions of dollars. Indeed, these were hungry, hungry student-lending-pythons. In fact, an audit review, which was finally carried out (years after Oberg discovered the problem) showed that the department needed to recover $278 million dollars from Nelnet.
The money was not recovered. Nelnet agreed to the blockage of the subsidies. End of that leakage-story. Right? No. They continued to find loopholes and managed to slither through.
Oberg didn't like that. He was doing his job, and yet was being told not to. Congress tried to take care of the other subsidies that allowed the lenders to fatten themselves up (pythons are hungry creatures). In 1997 the Clinton Administration tried to cut off all subsidies and end this systemic problem.
At that juncture in his career, Oberg was an Educational liaison to Congress. He approached Sally Stroup about this legislation. At the time Stroup was acting as senior aide to the Republican chairman of the House education committee.
Oberg speaks of their meeting, 'Sally told me there was no way that language was coming out. . . . She didn't give me a reason -- just forget it.' Sally, who was clearly acting as an advocate for students, went onward and upward in politics. She became an assistant secretary of education in the Bush administration.
Bite that off, digest it, and come back for some more later . . .