Filling the Ranks

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Another day, another set of dramatically-expanded regulatory efforts by the US Department of Education (ED) that are getting widespread complaints of overreach but applause from the activist groups behind the efforts. Bundled Services Exception and third-party servicer (TPS) guidance has been followed by an extensive set of rules that will gut State Authorization Reciprocity and expand Gainful Employment scope and require disclosure / consent across the higher ed landscape, as described by Inside Higher Ed:

There were more than 7,500 comments on this set of proposals, while we have not categorized the comments as we did with TPS expansion, from first glance it appears the vast majority were against the changes, often describing a vast overreach (as noted again in IHE).

The Same Advocates Driving Policy

This is the fourth post on the remarkable influence of the Arnold Ventures-funded coalition on US Department of Education policy. In the first post I described how John and Laura Arnold, who made their initial fortune through Enron, had become the primary funder of a coalition of think tanks and advocacy organizations. This coalition is the driving force behind recent regulatory guidance actions aimed at Online Program Management (OPM) companies and the broader EdTech market through proposed expansion of third-party servicer (TPS) definitions.

In the second post I described the actions of this coalition that go beyond regulatory actions, including lawsuits coordinated with open letters and advocacy masquerading as research.

In the third post I described that this Arnold Ventures-funded coalition has common cause with a broader consumer protection mindset that goes well beyond reining in OPM companies. This coalition is also behind Gainful Employment proposed regulations, the gutting of State Authorization Reciprocity, changes in Professional Licensure, and many other rule making changes that will impact the entire higher education industry.

In these earlier posts I stated that correlation is not causation - I was not saying that Arnold Ventures told the think tanks what positions to take, but they are the common funding source and are taking the coordinated campaign approach to a new level. In addition, I am not saying that Arnold Ventures is the only funding source for these organizations, particularly for the larger, longer-term ones like New American, Center for American Progress, and The Century Foundation (in contrast to some others that are essentially wholly-owned subsidiaries). The crucial point here is that these groups are not independent - they share views and coordinate on campaigns often connecting quasi-research and lawsuits with open letters and official public comment.

Note that with today’s post I am implying causation.

Personnel is Policy

There is one other aspect to how this coalition works that is crucial if one wants to understand how ED policy gets made and what to expect next, and that aspect comes down to personnel. While previous administrations had their own versions of the regulatory revolving door, with the Biden administration’s ED takes it to a new level. The influx - both from and to - the Arnold Ventures-funded coalition set the stage from 2021 for this year’s regulatory actions.

I wanted to get a sense of key personnel who have been hired into ED or have left ED since 2021. I do not have a method (yet) to comprehensively look at all ED personnel, so I started with Department staff that have been quoted in articles describing recent regulatory actions impacting higher education institutions, and from those who participated in public comment sessions, and those listed as key personnel in the Department’s website for the Office of the Secretary. Given the scope of our regulation coverage, I restricted analysis to staff working on postsecondary issues.

From the senior ED staff I analyzed, more than half came from (at least in the past few years) the AV coalition, and only two that I could find were previously employed at higher education institutions. Both of these former higher ed leaders were hired in 2022, which might represent a recognition that ED does not have staff that understand how colleges and universities actually work. But overall, the staffing of ED shows how and why it takes positions that appear divorced from an understanding of higher education institution operations and seem likely to generate countless unintended consequences.

And the hiring goes both ways, with four senior leaders that went from ED to AV coalition organizations, either before the current admin only to be move back to ED since 2021, or new transitions in 2022. The door is revolving.

Important Personnel

These are not just any ED staff - some of these people are the most influential on current regulatory actions. The most important, of course, is the Under Secretary James Kvaal who was at ED during the Obama administration and subsequently president at The Institute for College Access & Success (TICAS). It was during Kvaal’s leadership at TICAS that the organization secured $2.4 million in funding from Arnold Ventures, and he now leads ED’s efforts to create virtually the entire set of AV-recommended policies despite widespread alarm from colleges and universities.

Toby Merrill was co-founder and director of the Project on Predatory Student Lending, and during her time there the organization secured $4.5 million in funding from Arnold Ventures. Merrill is now Deputy General Counsel at ED and is one of the leads on efforts for student loan forgiveness as well as defending ED against 2U’s lawsuit over the TPS regulatory guidance.

There are other examples, but I don’t want to go through all of them; instead, I will say that many if not most of the key ED leaders pushing today’s massive regulatory changes to US higher education worked in the advocacy groups with common funding from a single billionaire couple.

Revolving

The issue is not just past employment for government employees - it is also future employees, and we are already seeing examples of people moving both ways between ED and advocacy groups. James Kvaal is one example, but Clare McCann is another. New America from 2011 - 2014, ED from 2015 - 2017, New American from 2017 - 2021, ED from 2021 - 2022, Arnold Ventures starting in 2022. Scott Sargrad, Deputy Chief of Staff for Policy and Programs at ED, worked at ED initially from 2009 - 2015, then at Center for American Progress from 2015 - 2021, and ED since 2021.

People do not always represent the views of their former employer in new jobs (I can’t say that I take a pro PerotSystems view, for example), but they are more likely to do so if the previous organization might also provide their future jobs. Especially when their policy positions actually do represent the views of their former (and potentially future) employers. In the case at hand, I would treat “employer” to be the coalition, not just a specific organization.

The influence comes not just through funding of advocacy groups, it comes through personnel. There is a revolving door with a different form of regulatory capture, but unlike in some other industries, in education it is between think tank advocacy groups and ED. This is how ED policy is made, and there is more to come.

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