Republicans on the House Oversight Committee on Thursday threatened to subpoena the head of the Education Department’s student financial aid office who resigned this week after a clash with Education Secretary Betsy DeVos.
James Runcie resigned on Tuesday night after defying DeVos’ directive to testify before the oversight panel about erroneous payments in the student loan and Pell grant programs. In an internal memo about his resignation as chief operating officer of the Office of Federal Student Aid, Runcie alluded to a range of simmering management issues at the department.
“The issuing of a subpoena is still an open item,” Rep. Mark Meadows (R-N.C.), the chairman of the House oversight subcommittee holding Thursday’s hearing told reporters. “It’s important that we hear from Mr. Runcie and at least get some of his perspective on some of these issues.”
Meadows opened the hearing by saying that Runcie’s refusal to testify was a “slap in the face” to taxpayers, who he said paid Runcie more than $430,000 in bonuses since 2010.
House Oversight Chairman Jason Chaffetz (R-Utah) “still has questions that Mr. Runcie needs to answer,” said his spokeswoman, MJ Henshaw. “Hopefully that’s done voluntarily. If not, we will explore the option of a subpoena.”
Jay Hurt, the chief financial officer of the department’s Office of Federal Student Aid, testified in place of Runcie on Thursday. GOP lawmakers pressed Hurt about the increase in the agency’s erroneous student loan and Pell grant payments, which both rose last year.
The Education Department estimated that improper payments for student loans in fiscal year 2016 were $3.86 billion, up from $1.28 billion the previous year. Improper payments in the Pell grant program increased from $562 million to $2.21 billion over the same time period, according to the department. None of those met the department’s target benchmark for such figures.
Hurt said that the increase was due in part to a change in how the department calculated improper payments. He also warned that next year’s improper payment rate will again increase because of a months-long suspension of an online tool that helps borrowers avoid mistakes by automatically inputting their tax information.
The agency’s Inspector General, Kathleen Tighe, testified that while the revised calculations were “more realistic,” the department still needs to “intensify its efforts to identify and address internal controls and oversight to address the root causes” of improper payments.
GOP lawmakers on the panel said they were concerned that Runcie and Hurt continued to receive bonuses even as the improper payment rates for student aid programs increased in recent years.
Runcie’s resignation memo suggests that political appointees at the department had been micromanaging his office, which he said had been stretched too thin. He said in an email to POLITICO that he resigned because of differences at the department between “operational leaders” like himself and political appointees.
But Meadows blasted that assertion on Thursday. He said that Runcie “may be upset that the secretary is micromanaging” but “anybody looking over your shoulder when you’re losing $3.6 billion might be considered micromanaging. I call it proper oversight.”
Republicans on the committee also said that Runcie’s resignation on Tuesday night came after they had already threatened to subpoena him and gave him 20 days to respond to a request to appear at the hearing.
Meadows said he had previously been frustrated with attempts to get Runcie to testify before the committee.
“He has shown a willingness to not testify before Congress in the past. I’m not saying that that’s where it is today,” Meadows said. “I want to take him at his word that perhaps he had a personal conflict, but we were willing to accommodate. And what we found was is that he chose to resign instead of coming before Congress.”
Democrats on the panel, meanwhile, steered clear of the Runcie resignation. They instead criticized DeVos’ proposal to overhaul student loan servicing and slammed the department for not doing enough to guard against student debt relief scams.
Sens. Elizabeth Warren (D-Mass.) and Patty Murray (D-Wash.) said earlier this week that they’re concerned that Runcie’s resignation appeared to come after political interference from DeVos. Warren called on Congress “to get to the bottom of what’s going on here.”