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Top University Suspends Official in Student Loan Scandal Probe
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ShareApril 05, 2007 5:51 PM
The University of Texas at Austin has just placed the director of student financial aid on paid administrative leave in connection with a brewing nationwide student loan scandal.
New York Attorney General Andrew Cuomo yesterday sent a letter to the University of Texas (UT) alleging that Lawrence W. Burt received stock from Student Loan Xpress Inc., a company that is included on the university's preferred lender list.
In a statement released today, UT President William Powers Jr. said, "It is important that the university ensure the integrity of its financial aid program and maintain unimpeachable practices on behalf of students and their families."
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Powers authorized Vice Chancellor and General Counsel Barry D. Burgdorf of the University of Texas System to lead the investigation into the matter.
ABC News reported yesterday the executive director of Columbia University's financial aid department was suspended for allegedly profiting from Student Loan Xpress.
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David Charlow, the senior associate dean for student affairs at Columbia University, allegedly netted $100,000 by selling 7,500 stock options and 2,500 stock warrants granted to him by the Education Lending Group in 2001, officials said. Student Loan Xpress was formerly a subsidiary of the Education Lending Group and is now part of the CIT Group, a New Jersey-based financial services firm.
The New York Attorney General's Office also sent a letter to the University of Southern California yesterday, stating that it had learned Ms. Catherine Thomas, the associate dean and director of financial aid at USC, may have improperly received significant amounts of stock from Student Loan Xpress, also on the USC's list of preferred lenders.
USC released a statement yesterday saying, "We have just received a copy of the Attorney General's letter and will now review the information in the letter and respond."
April 5, 2007 | Permalink | User Comments (4)
My daughter has a student loan with a lending institution from Wisconsin. The interest rate has gone up to 11.7 % which appears to me outrages.
Based on the ABC investigations in frauds with students loan, I would appreciate any comments, advise if such interest rates are legal and how to go about getting them lowered to a more reasonable rate.
Posted by: Reinhold Nelissen | Apr 5, 2007 7:23:22 PM
fraud, misrepresntations, outrageous interest rates.... sounds like the american way - so what else is new?
Posted by: henry | Apr 8, 2007 11:17:37 PM
It sounds to me like your daughter has a private loan. Private loans are based on the credit of the student and co-signer and generally have a variable rate. The interest rate is usually only that high (11.7% as Reinhold Neilssen said) because the student or the co-signer does not have good credit.
Whenever you borrow a loan it's always important to read the fine print. Unfortunately, today kids just don't bother to read the terms and conditions of a loan and often get themselves in over their heads!
Posted by: Ms. Fisher | Apr 9, 2007 9:25:14 AM
Your daughter should look into the Federal Direct (Stafford) Loan program. They have great programs to consolidate loans, and also lower the rate and monthly payment.
Posted by: Steve | Apr 16, 2007 5:41:34 PM
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