More Financial Aid Corruption

April 6th, 2007

The Wall Street Journal reports today that an official at the U.S. Department of Education held shares in a company that issues federally guaranteed student loans. Looks as if the financial aid community is keeping the New York attorney general awfully busy these days.

Interesting to compare Columbia's PR response to the Department of Ed's, whose press page doesn't even mention the scandal. (Columbia's news page gives the dean's response top billing.) As of today, that Department of Ed official (Matteo Fontana) is still listed on the staff page, while the financial aid officer at the center of the Columbia scandal has been suspended.

More postings on the financial aid racket here, here, and here.

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re: More Financial Aid Corruption

On April 7th, 2007 Visitor says:

Even if it is the tip of the iceberg, its not likely much will change: Even without the stock and financial kickbacks, students would have the same loans, with the same terms, and the same amount of debt, with the same dire consequences. Schools will continue to let students take out those loans to cover the rising tuition costs.

I suspect, however, US News will start thinking about changing its rankings methodology to respond to these concerns. Include, in all educational rankings, total indebtedness of the student body in relation to their marketability.

US News could begin ranking lenders so that schools don't have to create these "preferred lender lists".