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Jun 02 2017
by Ben Norrito

What the Federal Student Aid Chief's Resignation Means for College Students

By Ben Norrito - Jun 02 2017
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On Tuesday, the Federal Student Aid Chief, James Runcie, resigned from his position. Runcie, who was a holdover from the Obama administration, claimed to have quit due to clashes with the Trump Administration and Education Secretary Betsy DeVos. The federal student aid chief oversees all types of aid (both loans and grants) distributed to students. They are responsible for overseeing the processing of the FAFSA and determining the money distributed to students, which means that this resignation is a big deal for college students. Along with his resignation, Runcie sent an email to the Department of Education warning about “brewing management problems perceived within the agency”. These two occurrences have shaken up the agency, and have cast uncertainty on the future of the student loan program.

There were two major policy moves by members of the Trump Administration that led to Runcie quitting. First, the President proposing massive budget cuts of up to 50 percent of the Federal Student Loan Department (FSA). This would massively increase borrowing and limit aid programs for students, something Runcie was against. Secondly, this resignation was prompted by an order from DeVos telling Runcie to testify before Congress about the Departments supposed “improper loan payments”. 

However, there are competing narratives about why the resignation happened. According to NPR, James Runcie claimed that “I cannot in good conscience continue to be accountable as Chief Operating Officer given the risk associated with the current environment at the Department.” However, the Education Department spokesperson Liz Hill claimed “he chose to resign rather than face Congress” and blamed Runcie for the mismanagement that has reportedly plagued the Department for years. These competing narratives are troubling and continue to show signs of inter-conflict, not only within the Education Department but within the overall Trump Administration as well.

A new Chief Loan Officer has two possible impacts on college students. In a more positive, but less likely, scenario, this resignation can mean that a lot of mismanagement problems within the department will be solved. The Trump Administration accused Runcie of mismanagement, and if they are right, Runcie's departure could allow for reform within the FSA. This could lead to improvement of lending issues that many students experience, a huge benefit for students. Another, more likely, scenario is a move of the FSA to the Treasury Department. This was also proposed by the Obama Administration, and it could help to localize the movement of money and allow for reform of the FSA since it would now be located in a more stable department. However, a pilot program by the Treasury Department failed to show the expected benefits, making this a risky move. Another negative for students is that a change of leadership could result in a leader who is more loyal to Trump than to resisting budget cuts. This could limit the aid going to students and make it more difficult for them to pay for their educations. 

The change of leadership in the FSA has definitely shaken up the department. In a time of increasing political instability and conflict within the Education Department, and Washington as a whole, the resignation adds to the increasingly complex narrative. The FSA has often been the center of controversy and the move could allow for student loan reforms which could improve the department's efficiency. However, the lack of experienced leadership could further damage the FSA and students as a whole. Only one thing is certain, the loans and lives of many students are up in the air as the future of the FSA is debated.

Lead Image Credit: Jay Castor via Unsplash 

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Ben Norrito - SUNY New Paltz

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