Top University Suspends Official in Student Loan Scandal Probe

By Anna Schecter

Apr 5, 2007 5:51pm

The University of Texas at Austin has just placed the director of student financial aid on paid administrative leave in connection with a brewing nationwide student loan scandal. New York Attorney General Andrew Cuomo yesterday sent a letter to the University of Texas (UT) alleging that Lawrence W. Burt received stock from Student Loan Xpress Inc., a company that is included on the university’s preferred lender list. In a statement released today, UT President William Powers Jr. said, "It is important that the university ensure the integrity of its financial aid program and maintain unimpeachable practices on behalf of students and their families." THE BLOTTER RECOMMENDS Blotter Ivy League Official Cited in Student Loan Scandal Blotter National Probe: Colleges Take ‘Kickbacks’ From Student Loan Lenders Click Here to Check Out Brian Ross Slideshows Powers authorized Vice Chancellor and General Counsel Barry D. Burgdorf of the University of Texas System to lead the investigation into the matter. ABC News reported yesterday the executive director of Columbia University’s financial aid department was suspended for allegedly profiting from Student Loan Xpress. Click Here for Full Blotter Coverage. David Charlow, the senior associate dean for student affairs at Columbia University, allegedly netted $100,000 by selling 7,500 stock options and 2,500 stock warrants granted to him by the Education Lending Group in 2001, officials said. Student Loan Xpress was formerly a subsidiary of the Education Lending Group and is now part of the CIT Group, a New Jersey-based financial services firm.    The New York Attorney General’s Office also sent a letter to the University of Southern California yesterday, stating that it had learned Ms. Catherine Thomas, the associate dean and director of financial aid at USC, may have improperly received significant amounts of stock from Student Loan Xpress, also on the USC’s list of preferred lenders. USC released a statement yesterday saying, "We have just received a copy of the Attorney General’s letter and will now review the information in the letter and respond."

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