Huge Bonuses Awarded to Former Official that Failed to Comply with Federal Law for Years

Huge Bonuses Awarded to Former Official that Failed to Comply with Federal Law for Years

Posted by Adam Kazda on 06/06/2017

James Runice Recently the head of the Department of Education’s student financial aid office, James Runcie, resigned amid questions from Congress about the billions in improper payments made under his watch.

According to Department of Education Inspector General Kathleen Tighe, in FY 2016, “The improper payment rate for the Pell program was 7.85 percent ($2.21 billion), which exceeded the reduction target of 1.87 percent; and the improper payment rate for the Direct Loan program was 3.98 percent ($3.86 billion), which exceeded the reduction target of 1.29 percent.”

The Federal Student Aid Office, which oversees the Pell Grant and Direct Loan programs, is responsible “for more than $150 billion in federal grants, loans, and work-study funds each year,” and is also responsible for the $1.2 trillion in outstanding student loans.

Under Mr. Runcie’s leadership, improper payments in the Direct Loan program increased from $1.28 billion in 2015 to $3.86 billion in 2016, and increased from $562 million in 2015 to $2.21 billion in 2016 in the Pell Grant program. Despite failing to comply with the improper payment requirements, since 2010, Runcie collected over $430,000 in bonuses.

Congress requested Runcie testify on the subject of improper payments, but he resigned shortly before the hearing. Runcie said in his resignation letter, "I have been consistently on record and clear about not testifying at the upcoming hearing on improper payments" adding he had “not heard a single compelling reason" for him to testify in front of Congress.

House Oversight and Government Reform Committee Chairman, Jason Chaffetz (R-UT), later released a statement on Runcie’s resignation saying, “It is disappointing Mr. Runcie would rather resign than testify before Congress” and “for years, the Inspector General and this Committee have warned the Department of Education of vulnerabilities to its $1.1 trillion federal loans program.”

While $6 billion in improper payments may not be a “compelling reason” for this official to testify, taxpayers need to know their money is not going to waste. Taxpayers also need to know why bonuses were awarded to officials that oversee poorly performing programs.  Congress should focus on oversight of the important programs administered by Mr. Runcie’s former office, and make sure the Federal Student Aid Office and the Department of Education take the necessary steps highlighted by the Inspector General to eliminate improper payments.

Programs like Pell and Direct Loan are intended to help younger generations get ahead. But, government waste and accumulating debt puts them further behind. Failing to address improper payments not only hurts the integrity of the programs, but perpetuates the massive debt burdens that put their economic opportunities further in doubt. If the federal government truly wants to help young people get ahead, proper oversight of federal programs and eliminating waste must be part of the equation.


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Adam KazdaAdam Kazda
Digital Content Creator
@Adam_Kazda
Adam joined Restore Accountability in 2016 and manages the Foundation's day to day creative operations. Previously, he spent two years on Capitol Hill working for Senator Tom Coburn and Senator Jeff Flake...FULL BIO