Federal Official in Student Loans Held Loan Stock

http://www.nytimes.com/2007/04/06/education/06loans.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1175865059-5gocHjP847eMVPLR2hHsTA

Federal Official in Student Loans Held Loan Stock


By JONATHAN D. GLATER and KAREN W. ARENSON
Published: April 6, 2007

A senior official at the federal Education Department sold more than $100,000 in shares in a student loan company even as he was helping oversee lenders in the federal student loan program.

The official, Matteo Fontana, now general manager in a unit of the Office of Federal Student Aid, was identified yesterday from government documents as a stakeholder in the parent company of Student Loan Xpress who sold shares in 2003.

His involvement with the company emerged a day after a widening investigation into the student loan industry revealed that three senior financial aid officials at Columbia University, the University of Texas at Austin and the University of Southern California had also sold shares at the same time.

The stock sales raise questions of conflicts of interest on the part of university officials charged with giving students advice on financial aid and loans and a government official who helped oversee the industry.

The Education Department said late yesterday that Secretary Margaret Spellings had just been briefed on Mr. Fontana and that the department was taking the matter “very seriously.”

“We are providing the department’s inspector general all relevant documents regarding this matter,” Samara Yudof, a spokeswoman, said in a statement. Officials declined to answer questions about the stock transaction.

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