Another (un)fine MES

One of the uglier, though ultimately commendable, aspects of the recent legislative session was the tussle between lawmakers and Maine Educational Services. The ugliness came from MES and the venomous lobbying/ad campaign the big-spending non-profit conducted to keep its student-loan empire intact. The commendable part was the work of lawmakers who stood up to the assault, who resisted the well-connected arm-twisters and who voted to restore accountability to the use of taxpayer-backed bonds for those loans.

Unfortunately, it’s not over. MES officials predicted bad things would happen if lawmakers meddled and now MES is doing it’s level best to make that prediction come true.

The most visible manifestation is Portland College, the totally on-line university spun off from MES that the Legislature refused to empower with degree-granting authority. Lawmakers had two fundamental concerns that Portland College officials failed to fully address — academic integrity and financial stability. A third concern that the college utterly ignored was the source of funding for this new enterprise.

That is now a vital issue, now that Portland College is moving to Montana. There is no evidence that the start-up funding, estimated at $2.6 million, came from anywhere other than MES, and MES’s funding, no matter how the tale is spun, comes from no place other than taxpayer-backed bonds. MES’s enormous revenues in excess of expenses (what non-profits call profits) is the result of its exclusive, no-bid contracts with the two state-created agencies that disburse the bonds and its failure to deliver on promised loan discounts. Getting straight answers was hard in Augusta; it will be impossible in Bozeman.

That lobbying/ad campaign, the one that worked so hard to trash the reputations of lawmakers and anyone else who asked questions about MES, cost, it now is known, some $204,000. That is known because MES just billed one of those state-created agencies, MELA, for it. MELA, the Maine Educational Loan Authority, gets its funding only from state bonds. The only purpose for those bonds is to make student loans more affordable, not to pay for hysteric mass mailings. If MES is, as its officiers say, a private business, it should pay its own bills.

The gist of that offensive and ultimately counterproductive campaign was that any substantive action by the legislature would end up hurting students. Now, students are being hurt, but don’t blame the Legislature.

MELA is, for now, completely under the control of MES — it has no employees, its board is essentially MES’s board. And it is the MELA board that last week decided to scrap a loan discount progream for medical students.

MES says the new rules requiring better disclosure of loan repayment terms made the med school program untenable and that the nature of med school itself made discounted loans too difficult to administer. Nothing has changed about med school in the few months. Disclosure is what MES said all along was the only remedy needed. This decision seems to be nothing more than a tantrum.

MELA will have a new board come August, when legislation giving gubernatorial appointments a majority and increasing public oversight takes effect. The new MELA board will, first of all, have to rescind that spiteful medical school decision. It will have to refuse payment of that lobbying/ad campaign bill or get a refund. And somebody’s going to have to go out to Montana and find out where that $2.6 million went.