Betsy DeVos Hands Victory to Loan Firm Tied to Adviser Who Just Quit

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Americans who default on some of their federal student loans are likely to pay more after Education Secretary Betsy DeVos reversed an Obama administration directive limiting some fees. But it turns out the Trump administration decision has some beneficiaries—including the father of a key DeVos lieutenant who just quit.

DeVos’s decision, announced Thursday in a memorandum to the student loan industry, allows companies known as guaranty agencies to charge distressed student debtors fees equivalent to 16 percent of their total balance, even when borrowers agree within 60 days to make good on their bad debt.

The reversal is almost certain to hand United Student Aid Funds Inc., the nation’s largest guaranty agency, a victory in its two-year legal battle against her department. The fees could translate into an additional $15 million in annual revenue for the company, filings in a related lawsuit suggest. Until Jan. 1, United Student Aid Funds was led by Bill Hansen, who served as Deputy Secretary of Education under President George W. Bush. His son, Taylor Hansen, a former for-profit college lobbyist, was until three days ago one of the few DeVos advisers with professional experience in higher education.

The younger Hansen resigned from the Education Department on Friday, department spokesman Jim Bradshaw said in an e-mail. Hansen couldn’t be immediately reached for comment on his departure.

Ben Miller, senior director for postsecondary education at the Center for American Progress, a persistent critic of the new Republican administration, said on Twitter the rule change was “an early Father’s Day gift in the Hansen household.” U.S. Senator Elizabeth Warren, a Massachusetts Democrat, was equally blunt: “There’s no question” that Taylor Hansen’s family ties posed a conflict of interest.

Tens of millions of dollars in revenue was at stake for companies such as United Student Aid Funds, which until 2015 had regularly charged borrowers the fee. A senior executive there last year warned in a court filing that the Obama administration’s decision to prohibit the fees—and to remind the industry that such fees had long been banned—generated “potentially massive retroactive liability” for companies such as United Student Aid Funds in the form of federal fines and lawsuits from aggrieved debtors. The company reckons it levied as much as $119 million in these fees from 2007 to 2015, or about $15 million annually.

Meanwhile, other companies active in student loan matters faced the prospect of having to reverse years of assessed fees and unravel tens of thousands of borrowers’ accounts to recalculate their balances, according to a legal filing last year by the National Council of Higher Education Resources, a Washington trade association. Had the Obama administration’s decision stood, a federal judge warned in 2015 that the entire student loan industry faced the prospect of being sued for allegedly violating anti-racketeering laws by imposing the fees.

DeVos’s decision is likely to put those concerns to rest.

With almost all senior positions at the Education Department vacant—and few political hires with professional experience in higher education—the younger Hansen may have wielded significant influence on DeVos’s policies. With his departure, the department has yet another post to fill.

“We have no idea what Betsy DeVos thinks about or wants to do on higher education policy. If one of the key people advising her is someone whose close family member is hoping to charge defaulted borrowers a lot more money, that’s not a good sign of her agenda,” Miller said before the department announced Taylor Hansen’s exit.

Both the Education Department and Bill Hansen’s current organization, of which he is chief executive, Strada Education Network (formerly known as USA Funds), said there’s no impropriety. Taylor Hansen recused himself from “all matters” related to United Student Aid Funds’ lawsuit challenging the Obama administration directive, Bradshaw said. “He served ably and without conflict and decided his service had run its course,” Bradshaw said Monday, declining further comment. But it’s unclear whether Taylor Hansen’s recusal extended to internal department discussions over the appropriateness of the fees. Bradshaw didn’t answer additional questions, and Taylor Hansen didn’t respond to emails, phone calls, and a message sent on social network LinkedIn seeking comment.

Bob Murray, a spokesman for Bill Hansen, said no one representing the company had asked Taylor Hansen to intervene on its behalf in its dispute with the department. Furthermore, he said, United Student Aid Funds is now owned by Great Lakes Higher Education Corp. Murray said that Bill Hansen declined to comment.

United Student Aid Funds said in court filings that the Obama administration unfairly changed longstanding Education Department policy when it announced in 2015 that fees added to quickly resolved defaulted loans were illegal. For example, according to industry lobby National Council of Higher Education Resources, the department had never flagged the fee as inappropriate in any of the more than 135 audits or reviews it conducted of companies such as United Student Aid Funds since 1992. The feds, the group said, “knowingly acquiesced for years.” In the eyes of the industry, DeVos is simply righting a wrong by reversing Obama’s move.

Bill Hansen nonetheless benefits from DeVos’s decision. Strada is still liable for potential costs stemming from United Student Aid Funds’ lawsuit against the Education Department, as well as a related class action lawsuit filed by borrowers over the same issue, said Richard George, chief executive of Great Lakes.

United Student Aid Funds reached a proposed settlement in January to resolve the proposed class action, filed by Minnesota resident Bryana Bible in 2013 on behalf of borrowers charged what she alleged to be illegal fees. The deal calls for 35,516 borrowers, and their lawyers, to split $23 million to partially reimburse them for as much as $119.1 million in fees assessed over eight years that, under Obama administration guidelines, they shouldn’t have been charged. A federal judge is due to decide on the proposed settlement in June.

The now-permissible fees could also beneficially impact Strada’s future revenue under an agreement that calls for Great Lakes to give Strada grants partly based on how United Student Aid Funds’ loans perform, a person familiar with the matter said. When annualized, the fees represent about 13 percent of United Student Aid Funds’ average annual income over the past five years, according to its financial reports.

For struggling borrowers, said Rohit Chopra, a senior fellow at the Consumer Federation of America who previously advised Obama’s Education Department and was the top student loan official at the federal Consumer Financial Protection Bureau, “this just adds insult to injury.”

(h/t Bloomberg)

Trump Accuses Clinton Campaign of Russia Ties

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President Trump on Monday questioned the Clinton campaign’s alleged Russia ties less than an hour before the House Intelligence Committee held its first public hearing on the Kremlin’s involvement in the 2016 election.

“What about all of the contact with the Clinton campaign and the Russians? Also, is it true that the DNC would not let the FBI in to look?” Trump said in a Monday morning tweet.

FBI Director James Comey and NSA Director Mike Rogers were testifying on the issue Monday morning on Capitol Hill. They were also to be asked about allegations Trump made that President Obama tapped Trump Tower during the 2016 election.

With Trump’s latest tweet, it appears he’s hoping to influence what questions the witnesses will be asked at the briefing, as he tries to turn attention away from his campaign toward his vanquished rival, Hillary Clinton.

In other tweets Monday, Trump denied that he colluded with Russia during the presidential election — calling the allegations “made up” by Democrats and “FAKE NEWS.”

“James Clapper and others stated that there is no evidence Potus colluded with Russia. This story is FAKE NEWS and everyone knows it!” Trump said in a tweet, referring to statements made two weeks ago by the former director of national intelligence during the Obama years.

He added, “The Democrats made up and pushed the Russian story as an excuse for running a terrible campaign. Big advantage in Electoral College & lost!”

The former top spy told NBC’s “Meet the Press” on March 5, “We had no evidence of such collusion.”

On Sunday, the top Democrat on the Intelligence Committee, Rep. Adam Schiff (D-Calif.), claimed, contrary to Clapper, that there is evidence of collusion.

“I was surprised to see Director Clapper say that because I don’t think you can make that claim categorically as he did. I would characterize it this way at the outset of the investigation: There is circumstantial evidence of collusion. There is direct evidence, I think, of deception and that’s where we begin the investigation,” Schiff said on NBC’s “Meet the Press.”

“There is certainly enough for us to conduct an investigation,” he added.

(h/t New York Post)

Reality

An article in Breitbart News, the online news organization that has been run by Steven Bannon, before he became one of Trump’s top advisers, claims that mainstream media are ignoring damning evidence that Clinton benefitted from Russian involvement and are too focused on a “so-called scandal” surrounding the Trump administration.

An article dated March 4 listed five “bombshells” deals linking Clinton and Russia. Here’s one:

Hillary Clinton’s campaign chairman’s Joule energy company bagged $35 million from Putin’s Rusnano.

Hillary Clinton’s campaign chairman John Podesta sat on the executive board of an energy company, Joule Unlimited, which received millions from a Putin-connected Russian government fund.

Given the close ties between what Trump tweets and conservative media reports, it’s likely that story is the root of his tweet. But there’s been no formal evidence offered of ties between Clinton and the Russians.

Trump’s official POTUS Twitter Account Completely Misrepresented the FBI Director’s Testimony on Russia

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Donald Trump (more likely, his staff) spent the morning live tweeting the Russia hearing from the official @POTUS Twitter account, including videos with misleading captions seemingly designed to shift blame off him and his administration.

“FBI Director Comey refuses to deny he briefed President Obama on calls made by Michael Flynn to Russia,” the president tweeted.

The tweet implies Obama was the source of the Flynn leak. But Comey repeatedly told legislators in the hearing that he would not be able to comment on specific investigations and warned them not to read into his refusal to confirm or deny certain questions.

“Our ability to share details with the Congress and the American people is limited when those investigations are still open, which I hope makes sense,” Comey said. “We need to protect people’s privacy. We need to make sure we don’t give other people clues as to where we’re going. We need to make sure that we don’t give information to our foreign adversaries about what we know or don’t know.”

The president’s account also tweeted a similarly misleading caption and video combination featuring National Agency director Adm. Mike Rogers. He was responding to questions from Republican Rep. Devin Nunes about the NSA’s knowledge of Russian tampering in specific state vote tallies.

Rogers also offered this caveat: “I would highlight we are a foreign intelligence organization, not a domestic intelligence organization.”

The president seems unable to stop himself from composing tweets a reasonable person would understand to be false. The line of questioning occurred at all because Trump sent a series of tweets accusing President Obama of wiretapping his office at Trump Tower, an allegation the DOJ, FBI and NSA have all denied.

(h/t Vice News)

 

 

Trump Blasts ‘Fake News’ CNN’s Polls, CNN Fact-Checks Him Live

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President Donald Trump attacked CNN, one of his favorite media targets, Monday morning for continuing to conduct polls even though “their election polls were a WAY OFF disaster.”

Trump and other officials from his White House have been frequent critics of polling, emboldened by the president’s surprise victory that went against the predictions of nearly every 2016 poll. CNN, in a poll conducted several weeks before the election with the market research firm ORC International, released a poll showing Democrat Hillary Clinton with a 5-point lead over Trump nationwide.

“Just heard Fake News CNN is doing polls again despite the fact that their election polls were a WAY OFF disaster. Much higher ratings at Fox,” Trump wrote on Twitter, offering a plug for his preferred cable network, Fox News, where he is the recipient of generally favorable coverage.

While Trump’s social media post indicated that CNN had taken a hiatus from polling following the election, the cable network has actually continued to conduct regular polls. One survey, conducted earlier this month, showed deep divisions over key provisions in the Affordable Care Act but strong bipartisan support for a path to citizenship for undocumented immigrants who meet certain requirements.

A CNN poll conducted in January and released just before Trump’s inauguration showed diminishing confidence among respondents in his transition team and one released in early February began tracking his presidential approval rating.

(h/t Politico)

Update

Mediaite reports CNN immediately fact checked Trump on air. Chris Cuomo took notice of Trump’s tweet, and Poppy Harlow reminded Trump on air that “they’re not our polls, they’re Gallup polls.”

“It’s very different to poll people’s opinion of a sitting president as to how they may go vote,” Harlow said. Rucker expressed hope that Trump was watching, to which Cuomo dryly responded, “oh, he’s watching.”

Trump Tweets Suggest President (Still) Doesn’t Understand How NATO Works

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Less than 24 hours after a very awkward and frosty meeting with German Chancellor Angela Merkel, President Donald Trump took to Twitter to blast Germany for failing to pay enough to NATO and the United States for security. First though, the president began with a conciliatory message, writing that the meeting with Merkel went great. “Despite what you have heard from the FAKE NEWS, I had a GREAT meeting with German Chancellor Angela Merkel,” he wrote Saturday morning. But then the president added: “Nevertheless, Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!”

That statement echoed what Trump said during his joint news conference with Merkel on Friday, when he called on NATO members to contribute their “fair share,” saying that “many nations owe vast sums of money from past years and it is very unfair to the United States.” Although that could be open to interpretation, the commander in chief’s tweets on Saturday, though, seem to suggest Trump doesn’t really understand how NATO is funded. The New York Times explains:

The message was misleading because no nation actually “owes” money to NATO; its direct funding is calculated through a formula and paid by each of the 28 nations that are members.

Mr. Trump may have been referring to the fact that Germany, like most NATO countries, falls short of the alliance’s guideline that each member should allocate 2 percent of its gross domestic product to military spending, but that money is not intended to be paid to NATO or to the United States.

Ivo Daalder, the former U.S. permanent representative on NATO, called out Trump’s seeming mistake in a series of tweets that begin, “Sorry Mr President, that’s not how NATO works.”

“The US decides for itself how much it contributes to defending Nato. This is not a financial transaction, where Nato countries pay the US to defend them,” Daalder wrote. Although it’s true that only five of 28 NATO countries spend 2 percent of their GDP on defense, many are now increasing their defense budgets. “That’s a good thing,” he added. But even when they do increase their defense budgets, “no funds will be paid to the US … Europe must spend more on defense, but not as favor (or payment) to the US. But because their security requires it.”

These mistakes on Trump’s end are hardly new. During the presidential campaign, Trump frequently talked about NATO in a confusing way that left his statements open to interpretation.

(h/t Slate)

 

 

Trump to Spend 7th Consecutive Weekend at Trump-Branded Property, at Enormous Cost to Taxpayers

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President Trump doesn’t want to spend federal dollars on after-school programs, meals for poor people, or heating assistance that helps keep folks alive.

But he has no problem wasting more than $3 million a pop to spend weekends at his private Mar-a-Lago club in Florida. Trump has already made four trips there since becoming president on January 20, and on Friday he confirmed he’s headed there this weekend for the fifth time.

Despite vowing during his campaign that he “would rarely leave the White House because there’s so much work to be done” and “would not be a president who took vacations” because “you don’t have time to take time off,” Trump has visited Trump-branded properties each of the past six weekends. That streak will hit seven when Trump lands at Mar-a-Lago later Friday.

In fact, Trump has spent time at Trump-branded property every weekend of his presidency other than the very first, when he created chaos throughout the country by signing a Muslim ban executive order that was later stayed by a federal court.

As Quartz reported on Friday, after this weekend, Trump will have already spent about $16.5 million on trips to Mar-a-Lago. For that amount, Meals on Wheels could feed 5,967 seniors for a year and after school programs could feed 114,583 children for a year.

On Thursday, Office of Management and Budget director Mick Mulvaney defended the draconian cuts included in the Trump administration’s proposed budget by arguing that the federal government can’t ask “a coal miner in West Virginia or a single mom in Detroit to pay for” programs like the Corporation for Public Broadcasting. But one wonders whether those struggling Americans would rather have public radio or dole out their share of the $3.3 million a self-proclaimed billionaire is spending each weekend to mingle with his ludicrously wealthy club members down in Florida.

(h/t ThinkProgress)

Media

US Will ‘Not Repeat’ Claims GCHQ Wiretapped Donald Trump

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The US has agreed not to repeat claims the UK’s communications intelligence agency wiretapped Donald Trump during the presidential election campaign.

GCHQ rejected allegations made by White House press secretary Sean Spicer, that it spied on Mr Trump, as “nonsense”.

No. 10 has been assured by Mr Spicer he would not repeat the claims, which he cited from US TV channel Fox News.

The White House has said that Mr Spicer was “simply pointing to public reports, not endorsing any specific story”.

A spokesman for Prime Minister Theresa May said it had been made clear to US authorities the claims were “ridiculous and should have been ignored”.

Former foreign secretary Sir Malcolm Rifkind said it was not enough to promise not to repeat the allegation.

“That’s not the same as saying it was rubbish in the first place,” he told the BBC.

GCHQ rejected the allegations as “utterly ridiculous”. The unusual move by the agency to comment on the news came after Mr Spicer cited claims first made on Fox News earlier this week.

Mr Trump said Trump Tower in New York was under surveillance, but has provided no evidence for the claim.

The allegations of GCHQ involvement were initially made by former judge Andrew Napolitano.

Mr Spicer quoted Mr Napolitano as saying: “Three intelligence sources have informed Fox News that President Obama went outside the chain of command.”

He said Mr Obama “didn’t use the NSA, he didn’t use the CIA, he didn’t use the FBI and he didn’t use the Department of Justice, he used GCHQ.

“What the heck is GCHQ? That’s the initials for the British spying agency. They have 24/7 access to the NSA database.”

A GCHQ spokesman said: “Recent allegations made by media commentator Judge Andrew Napolitano about GCHQ being asked to conduct ‘wiretapping’ against the then president-elect are nonsense.

“They are utterly ridiculous and should be ignored.”

It’s a bad day for the transatlantic intelligence community when Britain’s largest and best funded spy agency – GCHQ – has to come out and publicly contradict a claim made by its closest ally.

GCHQ, MI6 and MI5 rarely, if ever, comment on ongoing intelligence stories in the news.

But the allegation made by Mr Spicer was seen as so potentially damaging – as well as being untrue – that it was decided to make an exception.

The BBC understands that a discussion was held earlier this week in No 10 on whether and how to respond.

When Mr Spicer repeated his claim of GCHQ collusion on Thursday the strongly-worded denial was written and published.

Career intelligence officers on both sides of the Atlantic will now be at pains to protect their historically-close relationship from any further perceived gaffes coming out of the White House.

(h/t BBC News)

Trump Administration Rescinds Obama Guidance on Student Loan Defaults

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The Trump administration on Thursday rolled back Obama-era guidance that forbade student loan debt collectors from charging high fees to defaulted borrowers, The Washington Post reported.

In a “Dear Colleague” letter, the administration tells agencies that collect on defaulted loan debt to disregard guidance prohibiting them from charging borrowers who default on their payments fees of as much as 16 percent of the loan’s principal and accrued interest.

It also says that the initial guidance handed down by the Obama administration in 2015 should have been subjected to public comment before it was issued.

“The Department thinks that the position set forth in the [Obama administration guidance] would have benefitted from public input on the issues discussed in the [guidance letter],” the Trump administration’s directive reads.

“The department will not require compliance with the interpretations set forth … without providing prior notice and an opportunity for public comment on the issues,” it continues.

The decision to rescind the guidance came two days after the Consumer Federation of America issued a report that finds that the number of people defaulting on their student loan payments is on the rise.

The Trump’s administration’s letter affects 7 million people with loans through the Federal Family Education Loan Program that are held by guaranty agencies. Individuals whose debt is held by the Department of Education are not impacted by the decision.

The amount owed in student loan debt has surpassed that of credit card debt — about $1.2 trillion.

(h/t The Hill)

Trump Accuses German Reporter of Citing ‘Fake News’

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President Donald Trump bristled at a question from a German reporter Friday afternoon who asked about his “America first” trade policies and disdain for the media, remarking that the reporter must have been reading “fake news.”

“Mr. President, ‘America first,’ don’t you think this is going to weaken also the European Union?” the reporter asked at Trump’s bilateral press conference with German Chancellor Angela Merkel. “And why are you so scared of diversity in the news and in the media, that you speak so often of ‘fake news’ and that things after all, in the end, cannot be proven, for example the fact that you have been wiretapped by Mr. Obama?”

“Nice friendly reporter,” Trump replied amid scattered laughter in the White House’s East Room. He did not directly address the reporter’s question about his disdain for the media, nor did he address a portion of that same reporter’s question to Merkel, which referenced past comments from the chancellor about walls coming down in seeking her thoughts on Trump’s policies.

The president did insist that he is “not an isolationist” but that he will insist, as he did on the campaign trail, that the U.S. is treated fairly in the international marketplace and does not fall victim to the pitfalls he blamed for job losses across the country.

“The United States has been treated very, very unfairly by many countries over the years and that’s going to stop. But I’m not an isolationist. I’m a free trader but I’m also a fair trader and our free trade has led to a lot of bad things happening,” Trump said, noting America’s significant trade deficit and the accompanying accumulation of debt. “We’re a very powerful company — country. We’re a very strong, very strong country. We’ll soon be at a level that we perhaps have never been before.”

“I am not an isolationist by any stretch of the imagination,” the president continued. “I don’t know what newspaper you’re reading, but I guess that would be another example of, as you say, fake news.”

(h/t Politico)

Trump: Don’t Blame Me When I Quote Fox News

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Donald Trump does not like taking responsibility for White House screw-ups. He’ll blame anyone else he can think of—even his friends at Fox News.

On Thursday, White House press secretary Sean Spicer set off an international incident when he suggested that British intelligence might have spied on Trump during the campaign in response to a request from President Barack Obama. Spicer made this remark while once again trying to defend his boss, who two weeks ago tweet-claimed—without offering any evidence—that Obama had “wiretapped” him at Trump Tower during the 2016 election. Since then the GOP chairs of the congressional intelligence committees (and many others) have declared there is no proof to back up Trump’s reckless charge, which apparently was based on a Breitbart news story that itself was based on a statement (or rant) by right-wing radio talker Mark Levin.

The obvious conclusion is that an angry Trump had tweeted out fake news falsely accusing his predecessor of criminal activity. But Spicer has continued to contend that Trump’s allegations had a factual basis of some sort. And at the Thursday briefing he cited Fox News analyst Andrew Napolitano, who claimed on that network that Obama had used the United Kingdom’s Government Communications Headquarters (GCHQ)—the British NSA— to eavesdrop on Trump with “no American fingerprints on this.” (Napolitano is no credible source. Like Trump, he has appeared on the radio show of conspiracy theorist Alex Jones. In 2010, Napolitano told Jones’ audience that it’s “hard for me to believe” that World Trade Center Building 7 “came down by itself” and that the 9/11 attacks “couldn’t possibly have been done the way the government told us.”)

Yet here was the White House depending upon a conspiracy theorist to charge that Obama enlisted the Brits to conduct illegal surveillance against Trump. The GCHQ went into a tizzy. Breaking with its tradition of almost always staying silent on public controversies, the British spy agency released a statement that said, No way! It called the allegation Spicer embraced “ridiculous.”  (British journalists were shocked to see any response from the super-secretive GCHQ.) And British officials told reporters they had privately received some form of apology from White House officials.

Yet on Friday afternoon, at a short press conference with German leader Angela Merkel, Trump indicated that he believed there was nothing to apologize for. Asked by a German reporter about the wiretapping allegation, he made a reference to “fake news” without addressing the matter. When a second German reporter pressed Trump on the issue, Trump first made a joke that he had something in common with Merkel. (The NSA had listened in on her cell phone.) Then he dismissed the significance of Spicer’s citation of the Fox News report: “We said nothing. All we did was quote…a talented lawyer on Fox.” The German reporter, Trump said, “shouldn’t be talking to me. You should be talking to Fox.”

Fox News, for its part, wasn’t sticking to Napolitano’s crazy story. Following the press conference, Fox anchor Shep Smith reported the network “has no evidence of any kind” to support the notion that Obama (with or without the Brits) had spied on Trump.

To sum up, the White House was citing phony information from Fox that Fox wouldn’t stand by. And now Trump was basically saying, You can’t hold me and my White House accountable for what we say. If someone says it on Fox News, that’s good enough for us. In other words, they report, we repeat.

This is a stunning statement and admission from a president: There is no need for me to confirm anything before tossing it out from the bully pulpit. It may not be a big news flash at this point, but Trump was eschewing any responsibility for White House statements. This is apparently Trump’s standard: If an assertion appears on Breitbart or on Fox News—if a conspiracy theory is spouted by a right-wing talk show—then it can be freely cited by the president of the United States without any consequence. With this stance, Trump has fully embraced his position as fake-newser-in-chief.

(h/t Mother Jones)

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