Student Loan Official At Education Department Steps Down

Tuesday, May 8th 2007, 5:53 pm

By: News On 6

WASHINGTON (AP) _ The head of the Department of Education's student loan office is stepping down amid growing criticism that the agency has been lax in overseeing the student loan industry.

Theresa Shaw is leaving her post as chief operating officer of the Federal Student Aid office, which she has held since 2002, the department said in a statement. The office administers federal student aid programs.

The statement said Shaw told Education Secretary Margaret Spellings in February that she planned to leave the department, but not until June 1.

Shaw previously worked at student loan giant Sallie Mae, also known as SLM Corporation. Critics in Congress and student advocates have complained that the department has too many people with ties to the student loan industry in charge of overseeing that industry.

Shaw headed the office where student loan official Matteo Fontana worked until it was disclosed that he had at least $100,000 in stock in a student loan company, an apparent conflict of interest. Like Shaw, Fontana previously worked at Sallie Mae.

The department's inspector general, John Higgens, said last week in a response to congressional Democrats that he would look into possible conflicts of interest involving department employees and lenders.

New York Attorney General Andrew Cuomo has been leading an investigation into the $85 billion student loan industry.