April 6 (Bloomberg) -- New York Attorney General Andrew Cuomo's probe of college lending practices includes a financial- aid official in the U.S. Education Department who held shares in a college student-loan provider.

Matteo Fontana held 10,500 shares of Education Lending Group Inc., now a subsidiary of CIT Group Inc., in 2003, according to a September 2003 filing with the U.S. Securities and Exchange Commission. Cuomo's office has issued subpoenas to CIT and Student Loan Xpress, a unit of Education Lending Group, according to his spokesman...

Fontana's holding was reported first on the blog of Stephen Burd on the Web site of the Washington-based New America Foundation, a nonprofit public-policy institute that focuses on education.

"There's a fundamental conflict of interest,'' said Michael Dannenberg, director of the foundation's education- policy program. "And often, students don't get the lowest- available loan rate when they follow the preferred-lender route..."

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