Inside Higher Ed

The office of Sen. Edward M. Kennedy (D-Mass.) released a report Tuesday [September 5, 2007] that scrutinizes a batch of practices and policies that in many cases, the senator alleges, violate federal laws and regulations governing dealings between colleges and lenders. Many of the findings build on accusations and revelations that have emerged in previous months...

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“We followed the rules in place at the time, and we did so in a way that… more

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… more

“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 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

It is not often that one’s research topic is the lead story in the national media, but the topic of financial aid has been in the forefront of the American consciousness from San Diego (home of Student Loan Xpress) to Albany, N.Y., (home to New York Attorney General Andrew M. Cuomo) and points in between.The stories of scandals, kickbacks, influence peddling, and fleecing — to highlight just a few of the phrases used by politicians and reporters —… more

With the scandal over conflicts of interest in student loans continuing to grow, Education Secretary Margaret Spellings is pledging tougher enforcement of ethics rules, as the Education Department released more information about sale of stock in a lender by an official who works on student loan issues.And in a sign of just how volatile the loan industry is today (and how lucrative it remains), reports emerged Friday morning that Sallie Mae, the industry giant, is in talks to… more

On Wednesday, the other shoe dropped in a growing investigation of colleges’ ties to the lenders they recommend to their students — and many experts on the loan programs were stunned by the developments.Administrators at Columbia University, the University of Texas at Austin and the University of Southern California were reported to have owned stock in a lender that they placed on their “preferred” list for students. Andrew M. Cuomo, New York State’s attorney general, sent a subpoena… more

Three years ago, the University of Nebraska’s Board of Regents, eager to find more funds for undergraduate need-based financial aid for students at its flagship campus in Lincoln, struck a deal in which the National Education Loan Network, would provide loan funds that the university would administer to its graduate and professional students. As part of the arrangement, authorized through a process known as “school as lender,” Nelnet, as the Lincoln-based lender is known, would give the institution more than… more

An old idea is about to resurface in Washington — potentially adding to the woes the student loan industry is facing in the Democratically controlled 110th Congress.Sen. Edward M. Kennedy (D-Mass.) is poised to introduce legislation that would require banks and other lenders to compete for the right to make federally guaranteed student loans, with the goal of identifying those who could offer the loans at rates that would cost the government the least, and using the savings… more

The U.S. Department of Education announced late Friday that it would allow a student loan provider to keep as much as $278 million in federal subsidies it has already received through its exploitation of a loophole in federal rules.Department officials portrayed the settlement reached with the Nebraska Education Loan Network, or Nelnet, as a defeat for the for-profit company. They noted that they were declining to pay an estimated $882 million in additional reimbursement requests that the company… more