Student aid officer quits US loans rulemaker panel

WASHINGTON, April 16 (Reuters) - A university financial aid officer has resigned from a federal rule-making panel after being asked to step down amid a widening scandal involving student loans, the U.S. Education Department said on Monday. Ellen Frishberg, student financial services director at Johns Hopkins University, has quit as a member of an Education Department committee that helps develop financial aid regulations, a spokesman for the department told Reuters.

Secretary of Education Margaret Spellings had asked for Frishberg's resignation last week.

A Johns Hopkins spokesman said Frishberg is on paid leave from the Baltimore-based university pending an internal inquiry into her receiving about $65,000 in consulting fees from lender Student Loan Xpress, a unit of CIT Group Inc. (CIT.N)

Frishberg could not be reached for comment.

Her resignation comes amid growing scrutiny of the links between commercial lenders and financial aid officers that critics say pose conflicts of interest.

Congressional investigators and attorneys general from three states are looking into possible kickbacks paid by lenders to aid officers in return for student borrowers being steered toward the lenders.

New York Attorney General Andrew Cuomo is scheduled to testify on April 25 before the U.S. House of Representatives Education and Labor Committee on "unethical practices and conflicts of interest that have recently been revealed within the student loan industry," the committee said on Friday.

Johns Hopkins has said that Frishberg received $43,000 in consulting payments from Student Loan Xpress, as well as $22,000 in tuition payments for a doctoral program.

The Education Department last week placed one of its own staff members, Matteo Fontana, on paid leave while his stock ownership in a student loan company is reviewed.

Fontana has been a senior executive at the Education Department. According to a September 2003 U.S. regulatory document, Fontana held 10,500 shares of Education Lending Group Inc., then parent company of Student Loan Xpress.

(To view additional stories about the U.S. student loan scandal, click on [nN16347086])

((Reporting by Kevin Drawbaugh, editing by Gary Hill; 202-898-8390, kevin.drawbaugh@reuters.com)) Keywords: STUDENTLOANS EDUCATION

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