Student Loans

“Thank you for considering signing on to the attached group letter, which encourages Congress to continue making higher education accessible and affordable using the widest range of government- and private-sector loan programs and partnerships,” the handwritten letter begins.Written on joint Nelnet and Consumer Bankers Association letterhead, messages like this one have been faxed to local chapters of the American Federation of Teachers, AFL-CIO and other unions over the past couple of months, setting off a backlash over what… more

THE Department of Education’s proposed new standards for overseeing student loans — a response to the growing scandal involving kickbacks from lending institutions to university student-aid officials — are a step in the right direction. But the department and the Bush administration could go further in making student loans cheaper, less cumbersome and, most important, not susceptible to corruption.

In fact, the method for achieving this is already on the books: the William D. Ford Federal Direct Loan Program, which… more

Secretary of Education Margaret Spellings sounded like a reformer when she testified on Capitol Hill earlier this month over recent revelations of waste, fraud and bribery in the $85 billion-a-year student loan industry."Federal student aid is crying out for reform," said Spellings, speaking before the House Committee on Education and Labor. "The system is redundant, it's Byzantine, and it's broken..."Between 2001 and 2006 a handful of companies that issue federally guaranteed student loans had what one… more

In response to scandals rocking the student loan industry, the House has quickly passed reform legislation to require more disclosure from lenders as well as university codes of conduct, and Senate action is expected. But the larger issues of rising college costs and students' increasing dependence on private loans have, for the moment at least, taken a back seat. Yet that doesn't mean they've gone away. College costs have risen far faster than inflation and also outpaced the… more

The financial aid directors at Columbia and Johns Hopkins Universities have lost their jobs, the second and third casualties of the student loan controversy that has battered higher education.In a terse statement e-mailed to reporters late Monday afternoon, Columbia announced that it had dismissed David Charlow, its executive director of financial aid and senior associate dean of student affairs, six weeks after it suspended him amid charges that he had owned stock in Student Loan Xpress, a loan… more

There were historic breakthroughs, such as the selection of Harvard's first woman president, and there was tragedy - the horrific shooting spree at Virginia Tech.But if the academic year now winding down had a theme, it was a more subtle one: dishonesty.Consider:- Nine MBA students at Duke University's Fuqua School of Business faced expulsion, and 25 others lesser punishments, for their roles in an exam-cheating scandal - the most high-profile of several this year. more

The head of the U.S. Education Department's student loan office announced her resignation yesterday amid mounting criticism of the agency's oversight of the loan industry.Theresa S. Shaw's exit as chief operating officer of the Office of Federal Student Aid comes as the New York state attorney general, congressional Democrats and the department's inspector general are investigating the loan industry and the web of personal and financial ties linking some key players in lending companies, universities and the government. more

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… more

On the eve of a congressional hearing on student loan practices, the House passed a bipartisan bill Wednesday that would bar lenders from giving gifts to colleges or school officials to win business, and would require schools to disclose any financial ties to lenders.The passage of the bill, pushed by House education committee chair George Miller, D-Calif., comes a day before Education Secretary Margaret Spellings is to testify at the hearing. Spellings is expected to be grilled about… more

The markers of a mushrooming student loan scandal are identical to so many of the rest: The Bush administration, determined to turn the federal government into a favor bank for its corporate cronies, ignored every indicator that the $85 billion-a-year student loan industry was rife with corruption...Never mind, the Bush people said. The lenders could police themselves.So the lenders voluntarily heaped ever more lavish perks on colleges and financial aid officers, including "revenue sharing" arrangements under… more