IG will investigate whether department misused funds

The Education Department's inspector general will investigate whether the administration misused federal money when officials pushed colleges and universities to change how they make student loans, according to a letter sent to lawmakers on Monday.

House Education and Labor ranking member John Kline, R-Minn., asked for the review after Education Secretary Arne Duncan wrote and called schools to urge them to abandon the Federal Family Education Loan program in favor of the Education Department's Direct Lending program. The administration wants to eliminate FFEL and use the estimated $79.6 billion in savings to increase aid to low-income students.

Kline asked Mary Mitchelson, the acting inspector general at Education, to investigate whether the administration violated the annual appropriations bill's stipulation that federal money not be used for lobbying activities.

"The calls made to institutions of higher education were clearly designed to persuade these institutions to switch to the administration's favored Direct Loan program, despite the fact that Congress has not mandated the switch," Kline wrote in a Nov. 25 letter to Mitchelson. "This type of activity is symptomatic of a brand of politics that employs deception and public pressure to combat political adversaries," he wrote.

The House passed legislation in September that would require schools to make the switch before students begin arriving for the fall 2010 semester. But the bill has stalled in the Senate, leaving colleges hanging; emergency legislation that would keep money flowing through FFEL has a July expiration.

The timeline for the investigation is unclear. In her Monday letter, Mitchelson said the investigation would begin "as soon as staff resources are available."