Gray Rebuffs Petition to Remove Corporation Members for Undermining Student Loans

by Alan Shihadeh

 
The Committee for Social Justice presented a petition
to Chairman Paul Gray on Friday which demanded that John Reed and
Lawrence Hough be removed from the MIT Corporation for their role in
the Congressional effort to eliminate Stafford Direct Loans, the main
source of financial aid for MIT students. The petition was signed by
almost 300 members of the MIT community.
	John Reed and Lawrence Hough are the CEO's of Citibank and the
Student Loan Marketing Association, both of which have lobbied
Congress to eliminate Stafford Direct Loans, a program in which the
federal government provides loans directly to educational
institutions, without going through intermediaries such as banks and
loan agencies.  The direct lending program was instituted in 1993 as a
way to reduce paperwork, administrative delays, and save money, but
was immediately undermined through lobbying efforts by banks and loan
agencies.  Financial institutions stand to make $9 billion over the
next 7 years if the direct lending program is eliminated, according to
Education Secretary Riley.  As a result of the lobbying efforts,
Congress has cut the number of Stafford Direct Loans by 5% in the
current budget reconciliation bill.
	MIT Corporation Chairman Paul Gray conceded on Friday that
John Reed and Lawrence Hough had clear conflicts of interest, but the
question is whether the conflict is strong enough to warrant having
them step down... I think not. When pressed to elaborate his position
by Committee for Social Justice member Jeff Hebb, Gray stated that the
petition says they don't serve the student body adequately. But the
trustees responsibility is to serve the institution in some longer
term holistic sense... they are accountable only to society, not any
particular constituency within the institute... If students were
represented on the Corporation, that would constitute an egregious
conflict of interest.
	The Corporation is the main governing body of the Institute,
and is responsible for all decisions over academic programs, research
activities, student housing, ROTC, and it appoints the Institute
president.  Its 70 members are self-elected, and self-policing, said
Gray.  Students and faculty can voice their opinions through the
Corporation Joint Advisory Committee.  When Hebb asked whether this
Committee has any voting power, Gray stressed that it is only an
advisory Committee. "So students have no vote in Institute
decisions?," asked Hebb.  "That'xs correct," Gray replied.
	After the meeting, Hebb commented that this is a completely
top-down, autocratic place...I can't believe that students and
faculty can't vote, and that they are construed as a special
interest when corporations like Citibank, Exxon, and Digital
aren't. What a scam.

The Committee for Social Justice will be meeting again on Thursday,
December 14 in room 5-134 at 6:30 p.m. to decide how to proceed.  All
members of the MIT community are invited to participate.  For more
information. e-mail: action95@mit.edu.


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