Monday, April 09, 2007

Unveiling corruption in student loans

A New York Times’ story on April 7 carried this lede:

A senior Education Department official who owned stock in a student loan company while helping oversee the federal lending program was placed on leave yesterday, the department said.


And in today's NYT:

The CIT Group said today that it had put on leave three top executives of its student loan unit, Student Loan Xpress, after revelations last week that stock in that company had once been held by financial aid administrators at three universities and by an Education Department official who helps oversee the federal student loan program.... Separately, the office of Andrew M. Cuomo, the New York attorney general, sent letters to three universities — Johns Hopkins University, Widener University and Capella University — raising concerns about relationships they had with Student Loan Xpress. At each school, according to Mr. Cuomo’s office, the loan company is a lender recommended to students.

Closer to home, Matt Singer at Left in the West out of Montana wrote about the corruption in the U.S. student loan program on April 6 and tipped his readers off to Anya Kamenetz's blog, calling it "a must-read for more info." Kamenetz is the author of "Generation Debt: How Our Future Was Sold Out for Student Loans, Bad Jobs, No Benefits, and Tax Cuts for Rich Geezers – And How to Fight Back."

Haven’t read the book but love the title. All of us with student loan debt up to our eyeballs – for us and our college-age kids – knew there was something rotten in the system. Thanks to the Times and Ms. Kamenetz for cluing us in.

According to Student Loan Justice, Wyoming Senator Mike Enzi and his PAC have benefitted handsomely from contributions from Sallie Mae, NelNet, and other student lenders. This report came out last October when Enzi was chair of the Senate committee that oversees the student loan system. He's been demoted since, so who knows whether the contributions are still rolling in.

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