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Betsy DeVos Suggests Federal Student Aid Should Be A ‘Standalone’ Entity
WASHINGTON, DC - JULY 15: U.S. Secretary of Education Betsy DeVos speaks during a "Combating Anti-Semitism Summit" at the Justice Department July 15, 2019 in Washington, DC. Administration officials and Jewish leaders are participating in the summit to discuss ways to combat anti-semitism.
Alex Wong/Getty Images

Earlier today, U.S. Secretary of Education Betsy DeVos delivered prepared remarks at a training conference for Federal Student Aid (FSA). FSA, bureaucratically housed within the U.S. Department of Education (DOE), is the office responsible for doling out “more than $120 billion a year in grants, work-study funds, and low-interest loans to approximately 13 million students,” according to the DOE’s website. According to the site, more than 21 million students last year applied for federal student aid in some form. FSA dates back to 1965, when its mission was established by the Higher Education Act.

In her speech today, Secretary DeVos began by lauding FSA for “com[ing] alongside students who lack financial resources to pursue higher education[and …] expand[ing] access to learning for those who aren’t wealthy, powerful, or well-connected.” But DeVos then observed that “students don’t pursue higher education in the same way they did back” in 1965. And so DeVos said that DOE, under her watch, is committed to “rethinking FSA, … modernizing FSA’s infrastructure, and totally revamping the way [FSA] connect[s] with students.” Hitting a crescendo, DeVos lamented how FSA “cannot fulfill its mission” in its current form.

Reaching the key portion of her speech, DeVos then suggested that FSA be bureaucratically restructured as a “standalone government corporation”:

One has to wonder: Why isn’t FSA a standalone government corporation, run by a professional, expert, and apolitical Board of Governors?

A separate FSA would be better positioned to deliver world-class service to students and their families as they finance higher education. It would manage the student loan portfolio and work to secure its financial strength and sustainability. And it would do all the things it’s been charged to do — only far better. …

This is an idea that warrants far more discussion. We should be discussing whether FSA would be stronger as a standalone entity — wholly and entirely separate from the U.S. Department of Education. We should be talking about the benefits of professional, experienced leadership who, as in the private sector, would be responsible for setting strategy for FSA, for overseeing the management of the loan portfolio, for ensuring institutions hold up their end of the bargain, and for reporting to Congress.

Structural reform at the FSA — and re-evaluating how the federal government entangles itself in the student loan enterprise, more generally — ought to be music to the ears of conservatives. According to, “Student loan debt has soared from $260 billion in 2004 to $1.4 trillion in 2017; average debt jumped from $18,650 to $38,000 over that same period; and the number of people over 60 with student loan debt has quadrupled in the last decade from 700,000 to 2.8 million.” Those statistics ought to strike the prudent, fiscally conservative, and debt-averse among us as genuinely harrowing.

Conservatives routinely assail the perverse incentive structures that lead many quixotic teens to take out large-scale loans en route to all-too predictable and ubiquitous leftist indoctrination on the university campus. Here is how Inez Feltscher Stepman articulated the sentiment earlier this year for the Claremont Institute’s American Mind site:

William F. Buckley wrote God and Man at Yale seven decades ago. Yet the university system still enjoys full public financial backing as though it had not degenerated from the elevated institution of yesteryear into an archipelago of training camps for Leftist activism. Whether Democrats or Republicans are in charge, Congress continues to increase its student loan investments, the lifeblood that has enabled insane cost increases well above inflation rates, as well as billions in direct grants to universities. …

Why should Republican legislators extend special lines of credit, financed by the two thirds of Americans who do not pursue a bachelor’s degree, to students to study at temples of wokeness? This is a question that few on the Republican side are asking, but more should.

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