Thursday, April 19, 2007

Sallie Mae--Dept of Ed Revolving Door

Stephen Burd of the New America Foundation ; It's kind of like if the EPA was run by former GM and Exxon execs.

"According to a report last week in The Wall Street Journal, at least eight senior Education Department officials during the Bush Administration either came from the loan industry "or have taken lucrative jobs in that arena since leaving the agency."

What effect has this revolving door had on the integrity of the loan programs? The answer to that question can be found in a little-noticed 34-page audit report that the Department's Inspector General released in September. That report blasts the Financial Partners division of FSA for failing to "provide adequate oversight and consistently enforce FFEL program requirements."

"According to the report, the Financial Partners division of FSA:
Emphasized partnership over compliance in dealing with guarantee agencies, lenders, and servicers.
Significantly overstated the number of program reviews it performed on lenders and failed to assess liabilities for regulatory violations.
Lacked adequate policies for conducting program reviews.
Failed to follow the procedures it did have when performing reviews."

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