More ugliness

Well....more ugliness from Andrew Cuomo's investigation. In a recent New York Times article, it appears that a Department of Education official was also on the take from Student Loan Express. Student Loan Express is a trade name of Education Lending Group, a formerly publically traded company before being purchased by CIT Group in 2005.

So this government official, Matteo Fontana, who worked in the Office of Federal Student Aid, specifically in the area that oversees the National Student Loan Database System, had sold about $100,000 of Education Lending Group stock in 2003. It's still being investigated how the stock was procured by Mr. Fontana, but given all the other instances that Cuomo has uncovered, I'm sure we won't be surprised. What's interesting about this case is that the National Student Loan Database System (NSLDS) houses all records of any individual who has ever received any form of government sponsored loan or grant. This is a valuable database for a private lender, as access to this data can pinpoint candidates for future PLUS or Stafford loans, as well as Consolidation loans.

We hope that Matteo enjoyed some of the money for a nice car or vacation, because we think he's going to be made an example of here. This just wasn't a smart move. The industry really needs to rally and begin distancing itself from the handful of improprieties that have been discovered here.