Last week, The Gavel reported that the Chairman of the Education and Labor Committee, George Miller, requested information from the Department of Education regarding the Student Loan Express stock held by at least one senior member of the Office of Federal Student Aid. Today, the CIT Group suspended three top executives of its student loan division, Student Loan Express, after it was revealed that financial aid officers at three universities and an Education Department official involved with administering the federal student loan program once held stock in the company.
Chairman Miller issued the following statement on the CIT decision:
Over the past several weeks, serious and alarming conflicts of interest within the college loan industry have been revealed — conflicts of interest that greatly jeopardize the credibility of our federal student aid system and the services that students and parents depend on to help afford today's high college costs. The CIT Group's decision is an important move in helping to uncover all relevant information relating to these practices. The Department of Education should immediately take similar measures to ensure that any individuals involved in this matter are held accountable for their actions.
For far too long, questionable practices and relationships have been muddying the waters of our federal student loan programs. We have an obligation to ensure that the federal student loan programs are working as intended: to help students and parents pay for college. It is clear that many changes, including requiring full disclosure of the nature of relationships between school financial aid officers and student lenders, must be made within the college lending industry as we work towards this goal.