WASHINGTON (Reuters) - The Democratic head of the U.S. House of Representatives education committee said on Tuesday investigators probing the Bush administration’s management of federal student loan programs had found “serious oversight failures by senior officials.”
Amid a conflict of interest scandal that is sweeping through the $85 billion student loan industry, Rep. George Miller asked the White House to turn over e-mails and other records, including those of Education Secretary Margaret Spellings, previously a White House domestic policy adviser.
Miller, of California, also wrote to Spellings seeking records from her as well as former Education Secretary Rodney Paige, former Paige adviser Beth Ann Bryan and other staffers.
He also asked for documents on administration oversight of Reading First, a reading program that is a key part of U.S. President George W. Bush’s No Child Left Behind education law.
Spellings is scheduled to testify on May 10 before Miller’s House Education and Labor Committee.
Congress and state attorneys general are probing allegations of misconduct across the student loan industry. Investigators accuse some college financial aid officers of taking payments and perks from lenders in exchange for placing the companies on “preferred lender” lists shown to students.
Student Lending Works, an Ohio nonprofit lender, said on Tuesday it has been left off all but 12 of 100 such lists.
“We believe that the ‘preferred lender’ list system is broken and needs fixing. It no longer serves the interests of students and their families,” the organization said.
Miller last week asked for an internal inquiry at the Education Department into possible conflicts of interest.
Another Democrat, Sen. Edward Kennedy of Massachusetts, has asked Spellings to hand over personnel files and financial disclosure reports for 27 Education Department employees. Kennedy heads the Senate’s education committee.
Last month a manager in the Education Department’s financial aid office was put on leave pending a review of his ownership of stock in Education Lending Group, former parent of Student Loan Xpress, now a unit of CIT Group Inc..
Along with Kennedy and Miller, New York Attorney General Andrew Cuomo has been campaigning to clean up the student loan business. Cuomo has said criminal charges may result.
As the inquiry has progressed, lenders including Citigroup Inc., Sallie Mae, JPMorgan Chase & Co. and Bank of America Corp. have agreed to a code of conduct recommended by Cuomo banning school-lender financial ties, “preferred lender” list payments and lender gifts to college employees.
On Tuesday, the Washington Post reported that the Bush administration killed a plan drafted at the end of the Clinton administration to rein in payments and gifts that student lenders showered on college financial aid officials.
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