"A child's learning is the funtion more of the characteristics of his classmates than those of the teacher." James Coleman, 1972

Wednesday, May 09, 2007

Spellings COO for Student Loans Resigns

Reports are piling up that Theresa Shaw, COO of the student loan division at ED, is resigning just in time for Maggie's new round of testimony before Congress in one of the numerous catastrophes that she oversees:

Theresa Shaw is stepping down as head of the U.S. Department of Education’s student-aid office, a position she has held since 2002.

Shaw resigns at a time when the government’s $68 billion student loan program is falling under intense scrutiny. The department said Shaw’s resignation is in no way related to Inspector General John Higgens looking into possible conflicts of interest involving deparment employees and lenders.

She previously worked for SLM Corp. [ticker: SLM], along with several other Education Department officials, and owns shares in student lenders Wells Fargo & Co. [ticker: WFC] and JPMorgan Chase & Co. [ticker: JPM]. Shaw headed the same office as Matteo Fontana, a student-loan official who was put on leave after it was revealed he had at least $100,000 of stock in a student lender.

Higgens’s investigation was spurred by Attorney General Andrew Cuomo’s probe into the student loan industry, through which he has uncovered the rampant use of payments by lenders to schools and aid officials in exchange for competitive marketing and lending advantages.

From 1980 to 2000 Shaw worked for Sallie Mae, rising to the position of CIO in 1999. Small world!!

Now speaking of holding shares at JP Morgan Chase, the Chronicle of Higher Ed is reporting new hanky panky between JP and some made officials at a number of higher learning institutions. So much corruption, so few investigators:

College officials at five institutions have received consulting fees from the lender J.P. Morgan Chase, Rep. George Miller, a Democrat of California, revealed today.

The officials — Melissa Smurdon of Butler University, Lynette Viskoski of Centenary College of Louisiana, Mark Martin of Lawrence Technological University, Louise Strauser of Lyon College, and Tyrone Thornton of Xavier University of Louisiana — signed contracts with J.P. Morgan Chase from 2005 to 2007 under which it provided technology support, conference presentations, and software installations, among other services, documents provided by Mr. Miller’s office show. All of the individuals except Mr. Thornton — a controller — work in their colleges’ financial-aid offices.

Mr. Miller also released documents showing that Chase had spent more than $70,000 on a luxurious harbor cruise in New York City for 200 attendees of the 2004 conference of the National Association of Student Financial Aid Administrators.

Mr. Miller, who is chairman of the U.S. House of Representatives education committee, has been conducting an investigation into conflicts of interest in the student-loan industry. His committee will hear testimony on Thursday from the secretary of education, Margaret Spellings, about the department’s oversight of the student-loan programs. —Kelly Field

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