An executive running the Education Department's Federal Student Aid office took home more than $250,000 in performance bonuses over the last four years, a period in which the office's oversight capabilities have been called into question.

Theresa Shaw, who is stepping down in June as chief operating officer of the office, received the bonuses under a 1998 law aimed at modernizing the organization's management. For fiscal 2003, Shaw took home a $71,250 bonus. She received a $60,000 bonus for fiscal 2004, $65,000 for fiscal 2005 and $65,000 for fiscal 2006, according to the department...

Shaw's office has been under increased scrutiny relating to its oversight of the student loan industry since revelations of improper financial ties among universities, companies and government officials came to light. In one instance, Matteo Fontana, who worked with Shaw at Sallie Mae before both came to Education, was put on administrative leave because he acquired at least $100,000 in stock in a student loan company, a perceived conflict of interest.

"The office of federal student aid under Ms. Shaw's tenure has been characterized by a lack of oversight and negligent administration of the student loan program," said Michael Dannenberg, education policy director at the New America Foundation, a Washington-based think tank. "Her office has cost taxpayers and students hundreds of millions of dollars. To find out that she got a bonus is just stunning."

Dannenberg's calculation is based in part on recent revelations that student loan companies -- most notably the Nebraska-based company Nelnet -- used a loophole to receive a government-guaranteed 9.5 percent rate of return on loans offered to students at much lower interest rates...

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