A Department of Education official who oversaw the student loan industry and owned at least $100,000 worth of stock in a student loan company has been placed on leave, a department spokeswoman said Friday.
Matteo Fontana, who keeps an eye on lenders and guarantee agencies that participate in the Federal Family Education Loan Program, was placed on leave with pay a day after his ownership of stock in Education Lending Group Inc. was disclosed by Higher Ed Watch, part of the New America Foundation, a nonpartisan think tank.
The case has been referred to the department's inspector general, John Higgins, said department spokeswoman Katherine McLane.
At issue is whether Fontana violated department conflict of interest rules.
McLane also said Education Secretary Margaret Spellings has asked for Lawrence Burt to resign from the department's Advisory Committee on Student Financial Assistance. That panel provides guidance to Congress and the secretary of education on student financial aid policy.
Burt, associate vice president and director of student financial aid at the University of Texas at Austin, is under investigation by the UT System Office of General Counsel regarding allegations of impropriety.
Securities and Exchange Commission records indicated Burt also owned 1,500 shares in Education Lending Group Inc., the former parent company of Student Loan Xpress. The company was on UT's preferred lender list, but Burt, who sold the shares in 2003, denied that his stock ownership had any connection to that listing.
Student Loan Xpress is now part of CIT Group Inc., one of several lenders targeted by New York Attorney General Andrew Cuomo in his probe of the student lending industry. . . .
Friday, April 06, 2007
Student Loan Crooks in the Friday News Dump
Monica Goodling isn't the only Bushie packing her bags on this Friday afternoon. From the AP:
at 7:07 PM