Update: This story originally incorrectly stated Betsy DeVos had financial ties to Windham Professionals as well as Performant Financial, but she did not. The story has been updated to correct that error.
Two months after the Republican majority in the Iowa legislature cut Attorney General Tom Miller’s budget by $600,000 to punish the attorney general for his opposition to policies of the Trump administration, Miller is pushing back against a policy change by the U.S. Department of Education. On Friday, Miller joined 19 other state attorneys general in a letter to Education Secretary Betsy DeVos, urging her to reverse her decision to end the sharing of information about student loans with state officials.
“Last month, the Department quietly eliminated its policy on disclosures of consumer complaints and related information for use by law enforcement agencies, including disclosures for use in criminal and civil fraud investigations,” the attorneys general’s letter said. “The Department offered no justification for abandoning its long-standing practice, stating merely that it ‘no longer intends to disclose any records under this routine use.’”
The letter explained the significance of the information-sharing practices that had been in place since 2000.
Information sharing allowed under the routine use exception recognized the important role that State Attorneys General play in protecting the nation’s student loan borrowers from unfair, deceptive, and predatory practices in the higher education field, as well as state regulators’ roles in licensing and supervising schools.
“If the administration had the interests of consumers at heart, it would continue sharing information with state attorneys general and other law enforcement agencies,” Lynn Hicks, communications director for the Iowa Attorney General, said in an email to Little Village.
This is not the first time DeVos has taken actions that favor student loan companies. In March, DOE published a notice in the Federal Register that it intends to implement a new policy preventing states from regulating student loans made by companies participating in a program administered by DOE. A month earlier, Politico reported on a DOE memo issued from late 2017 that “ordered the loan companies that work for the agency to avoid responding directly to information requests from third parties, which would include state regulators.”
DeVos had financial ties to companies involved with student loans when she became secretary of education, including Performant Financial Corp., which was awarded a contract to collect delinquent student loans by DOE in January. According to The Washington Post, the contract “could be worth hundreds of millions of dollars.” DeVos’ financial stake in an investment fund connected to Performant was one of 102 potential conflicts of interest identified when she was nominated as secretary. DeVos divested herself of her stake in the investment fund shortly after being sworn into office. Four months after the contract was awarded to Performant, the DOE cancelled it, stating that a new departmental approach to student loans would make the contract unnecessary.
The July 13 letter is the fourth time Miller has taken an official action to oppose a Trump administration policy since his budget was cut in the last legislative session. On May 31, Miller joined 16 other state attorneys general in a letter objecting to the Department of Health and Human Services relaxing health and safety standards for nursing homes. Miller was one of 21 state attorneys general to sign a June 18 letter protesting the Trump administration policy of separating migrant families at the U.S./Mexico border, and a week later he joined a multi-state lawsuit seeking an end to the practice.
For the past two years, Republican members of the Iowa legislature upset by Miller’s opposition to the Trump administration policies have cut the budget for the attorney general’s office.
“I find it extremely interesting that in 2017 alone, the attorney general has joined in 35 lawsuits against the current administration,” Rep. Gary Worthan, a Republican from Storm Lake, said in May, while explaining why it was necessary to cut Miller’s budget. Worthan went on to explain the budget cuts were meant to send Miller a message that he needed to stop opposing Trump policies.
“The time for nuance and subtlety is over,” Worthan said.
The Iowa House voted to offset most of the $600,000 cut by transferring $500,000 from the Consumer Education and Litigation Fund to the attorney general office’s general operating budget. The 2007 law creating the Consumer Education and Litigation Fund specifically states “moneys credited to the fund shall not revert to any other fund.” This will be the second year in a row the legislature has raided the fund to partially cover cuts to the attorney general’s budget.