James Runcie, a top-level staffer in the Department of Education, has resigned effective immediately after a row with Education Secretary Betsy DeVos.
The reason for Runcie’s resignation was not immediately made clear, but Politico reported that the chief of the Federal Student Aid (FSA) office, who has been in his position for seven years, resigned after being instructed by Secretary DeVos to testify before the House Oversight Committee regarding rising improper payment rates for federal student loans. Runcie refused to testify, and Department of Education officials say that Runcie didn’t provide a specific reason on why wouldn’t acquiesce to DeVos’ request.
Runcie was initially made FSA chief under former Secretary of Education Arne Duncan, who was former President Barack Obama’s first Education Secretary. As head of the FSA, Runcie was in charge of roughly $1.1 trillion in federal loans.
While the reasons remain murky, Runcie may have had a private disagreement with Secretary DeVos over her policy of making it more difficult for graduates with outstanding loans to settle their debts. In a June 2016 letter to Runcie, then-Secretary of Education John King asked Runcie to review all existing federal contracts with student loan servicers like Navient (formerly Sallie Mae) and USA Funds to make sure that debtors weren’t being taken advantage of. Another 2016 memo from Under Secretary of Education Ted Mitchell listed a set of new accountability guidelines for all future federal loan servicers to ensure proper customer service standards were being met.
However, once DeVos took over the agency, she made it clear that the Obama-era rules for student loan servicers were to be disregarded, opening the floodgates for debt service companies with unscrupulous records to gouge students and graduates with essentially no accountability. According to Bloomberg, the reasoning behind DeVos’ decision to loosen regulations on student loan companies was to cut costs within the agency. The Center for Media and Democracy reported that up until her appointment as Secretary of Education, DeVos had financial ties to controversial student loan servicers.
Jamie Green is a contributor to the Resistance Report covering the Trump administration, and lives in Ann Arbor, Michigan.