For months, leaders at the U.S. Education Department have battled the impression, fostered by Democratic members of Congress and New York Attorney General Andrew M. Cuomo, that the Bush administration did far too little to regulate the behavior of lenders and colleges until its hand was forced by the burgeoning scandal in the student loan industry...

Jeff Baker, who directs the policy liaison and implementation staff in the Education Department’s Federal Student Aid office, said at Monday’s session at the NASFAA annual conference that the department had sent letters late last month to more than 900 colleges where at least 80 percent of the institution’s federal student loan volume is held by one lender...

Asked if the June 29 letter represented an uptick in the department’s oversight of the loan programs, Baker said: “It’s our obligation to make sure our schools are in compliance. This is what we do.”

It’s what they’re supposed to do, but not necessarily what they’ve done sufficiently, as critics see it...

Michael Dannenberg, director of the education policy program at the New America Foundation, characterized the department’s scrutiny of colleges with one dominant lender as a “positive sign,” but said the Department of Education “still has a long way to go when it comes to oversight of the student loan program…. We’ve had scores of critical news stories, multiple investigations, firings and resignations of financial aid officials, reports of kickbacks, stock options, cash payments, and luxury gifts being offered by lenders to college officials and yet not one lender has been disciplined by the Department of Education. Why has Student Loan Xpress, which gave insider stock to leading college and federal officials, not been disciplined by the U.S. Department of Education?..”

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