Gifts to colleges from student loan companies more pervasive than had been disclosed

Gifts and payoffs to universities and their officials by student lenders were far more pervasive than had been disclosed and in some cases were demanded by university officials themselves in exchange for promoting lenders to students, according to a U.S. Senate report on the student loan industry.
Click here to read The New York Times article.

EARLIER: The Bush administration, fending off criticism that it has failed to provide adequate oversight to the student loan industry, has proposed regulations that would prohibit lenders from showering universities with gifts to drum up business.
Click here to read The Washington Post article.

A former financial aid director at Johns Hopkins University in Baltimore who cultivated a national reputation as a stickler for ethics accepted more than $130,000 from eight lending industry companies during her tenure, twice as much money as previously disclosed.
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Wells Fargo, one of the largest companies in the student loan business, has agreed to follow a code of conduct developed by the New York attorney general’s office governing relationships between lenders and universities.
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A top financial aid officer at the Johns Hopkins University in Baltimore has resigned after an internal investigation concluded that she had violated conflict-of-interest policies and received consulting fees from student loan providers. Ellen Frishberg has been on paid leave since April 9, when the university learned that she had received about $65,000 in consulting fees and graduate school tuition from Student Loan Xpress Inc. of San Diego, a lender recommended by Frishberg's office to students and parents.
Click here to read The Baltimore Sun article.

The University of Texas has fired the director of financial aid at its Austin campus for improper conduct. The school says the director had more ties to a student loan company than had been known. He had begun recommending the lender to students a few months after he bought stock in its parent company.Click here to read The New York Time s article.

ALSO: A investigation by the university says Lawrence Burt, associate vice president and director of UT-Austin's Office of Student Financial Services, should have disclosed his ownership of stock in the parent company of Student Loan Xpress Inc. and recused himself from decisions concerning the lender. Click here to read The Austin American-Statesman article.

With scandal rattling the $85 billion student loan industry, U.S. Education Secretary Margaret Spellings told a Congressional committee that she lacks legal authority to clamp down on many abuses. Spellings faced pointed questioning at the hearing from Democrats, who accused her department of mismanagement and complacency.More details links.....