I mentioned earlier today the scandal concerning the DoE allowing loan companies to loot subsidies intended to help poor students–they were informed about the loophole by a whistleblower, who was of course blown off. Well, somebody has at least finally paid the price. Er, I mean she’s taking time off to spend more time with Randall Tobias’s masseurs:
Under criticism that it has been lax in policing the $85 billion student loan industry, the Education Department announced yesterday that the chief official responsible for overseeing the loan program was stepping down.
The resignation of the official, Theresa S. Shaw, was made public two days before Education Secretary Margaret Spellings is to testify to a Congressional committee. Ms. Spellings is expected to face tough questions about the oversight of lenders’ practices and her department’s enforcement of policies against conflicts of interest.
Officials in the department characterized Ms. Shaw’s departure as chief operating officer of the office of federal student aid as unrelated to disclosures about how lenders have plied universities and financial aid officers with favors to win more business.
Ms. Spellings said in a statement that Ms. Shaw told her in late February that she would leave in June. That was after the Attorney General Andrew M. Cuomo of New York announced an investigation of ties between lenders and universities.
“Terri has told us that she plans to take some time off,” a spokeswoman for the department, Katherine McLane, said.
Ms. Shaw was appointed in 2002 by Education Secretary Rod Paige after 22 years in industry, mostly at Sallie Mae, the largest student lender.
Ms. Spellings called Ms. Shaw “a tireless advocate for students and families,” saying that the aid program “now delivers more aid to more students at a lower operating cost with greater accuracy than at any point in its history.”
Mr. Cuomo, by contrast, recently told the House education committee that the Education Department had been “asleep at the switch” in regulating the practices of lenders.
Once again, the changes from the Democratic takeover of Congress are manifest and salutary.