| Topic: |
Politics > Politics-USA |
| User: |
"Harry Hope" |
| Date: |
09 May 2007 09:38:58 AM |
| Object: |
Chief of Education Department's student loan office quits. |
Lawmakers also are expected to press Spellings about a settlement with
student lender Nelnet.
The department's inspector general found Nelnet improperly sought and
received an artificially high rate of return on many of its loans.
From The Associated Press, 5/8/07:
http://www.nytimes.com/aponline/us/AP-Student-Loans-Resignation.html?_r=1&oref=slogin
Federal Student Loan Official Quits
By THE ASSOCIATED PRESS
WASHINGTON (AP) --
The head of the Education Department's student loan office is stepping
down amid growing criticism that the agency has been lax in overseeing
the student loan industry.
Theresa Shaw is leaving her post as chief operating officer of the
Federal Student Aid office, a job she has held since 2002, the
department said in a statement.
The office administers federal student aid programs.
The statement said Shaw told Education Secretary Margaret Spellings in
February that she planned to leave the department, but not until June
1.
Shaw previously worked at student loan giant Sallie Mae, also known as
SLM Corporation.
Critics in Congress and student advocates have complained that the
department has too many people with ties to the student loan industry
in charge of overseeing that industry.
Shaw headed the office where student loan official Matteo Fontana
worked until it was disclosed by the Higher Ed Watch blog that he had
at least $100,000 in stock in a student loan company, an apparent
conflict of interest.
Like Shaw, Fontana previously worked at Sallie Mae.
The disclosure about Fontana's stock came a month after former Deputy
Secretary of Education Eugene Hickok acknowledged he didn't sell stock
he was supposed to sell while on the job and agreed to pay the
government $50,000 as part of a settlement.
Spellings recently said two lawyers would now examine financial
disclosure forms filed by department officials.
In response to questions from congressional Democrats, the
department's inspector general, John Higgens, said last week that he
would look into possible conflicts of interest involving department
employees and lenders.
New York Attorney General Andrew Cuomo has been leading an
investigation into the $85 billion student loan industry.
Cuomo says the inquiry has turned up evidence that some colleges
received a percentage of loan proceeds, which Cuomo calls kickbacks,
from lenders given preferred status by the schools.
Cuomo also said some college loan officers received gifts from
lenders.
The House is expected to consider bipartisan legislation Wednesday
aimed at stopping some of the practices Cuomo uncovered.
Spellings is to testify on the issue before a House committee
Thursday.
She is likely to face questions about conflicts of interest and a
department database that contains financial information about students
and recently was put off limits to lenders out of concerns the lenders
were mining it for marketing data.
Lawmakers also are expected to press Spellings about a settlement with
student lender Nelnet.
The department's inspector general found Nelnet improperly sought and
received an artificially high rate of return on many of its loans.
The department said earlier this year it would not try to recover the
overpayments but made Nelnet promise to stop the practice.
____________________________________________________
Harry
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