DOE and Hedge Funds: Sneaky Pants?

| July 28, 2011

The New York Times broke a story this morning about Iowa Senator Charles Grassley (R) and his suspicion that the DOE and certain hedge funds have become closer than just friends.

Frontline special on for-profit colleges and corporate america

The article details how Grassley and other government officials are looking into this relationship over allegations that staff at the DOE slipped government information about the overhaul of the for-profit college industry and their student loan programs to hedge fund managers. Grassley and others are concerned because many of these colleges leave students buried underneath mountains of educational debt. He sniffs a rat (aka Steve Eisman, who “made a fortune betting against the subprime mortgage market” [Ahmed, 2011]) who is trying to take advantage of younguns the same way they did homeowners-in-debt not so long ago. (See this link for an in-depth article into Eisman’s newest endeavor.)

Whether it is charter schools, metrics-mania or marketing in schools, the corporate world of capitalism is increasingly muddying the purpose of our education system and its responsibility to our nation’s children. This story is one more example of how this relationship between capitalism and public programs should really be pried apart with a crowbar. Why on earth should a hedge fund be privy to any information regarding government business? Sure, the hedge funders are free to lobby (whether they should be free to do that is another question), but should that mean they have unfettered access to private government information? No.

By the way, people, the Save Our Schools March and Rally begins today. If you can, make your way down to Washington, DC and let your voices be heard!