| McGreevey-era scandals are still lingering
The former head of the state's higher education loan program, Elizabeth Wong, says she was forced out after she refused to consider only African-Americans for jobs, grants and college loans. Wong spoke in a published interview done at the office of a lawyer representing her in a whistle-blower lawsuit. At the center of the litigation is former Secretary of State Regena Thomas, appointed by that gift that keeps on giving, former Gov. (and priest wannabe) Jim McGreevey, who teaches ethics at Kean University, which nevertheless keeps its accreditation. Wong, who is Asian-American, said Thomas, who is African-American, told Wong, "I'm taking control of the authority." Wong also said she was defamed when a McGreevey spokesman said she was forced out because of questions about her expense account.
Cooley denies financial aid probe problem
Thomas M. Cooley Law School President Don LeDuc said his director of financial aid's membership on a lending institution's board never translated into inappropriate preferential treatment for the student loan provider. And though that lending institution, San Diego-based College Loan Corp., recently reached an agreement with the New York Attorney General's Office to settle allegations that it gave perks to schools - and financial aid officers - that placed the company on preferred lender lists, LeDuc said Cooley has never been the target of an investigation. "You've got a headline out there that makes it sound like there's something wrong at Cooley," LeDuc said, referring to articles that ran Saturday in the Lansing State Journal and the Detroit Free Press. "In fact, there's never been what anybody would think of as an investigation." .
Veto threatens student-friendly CCRA
Although the House of Representatives approved the 2007 College Cost Reduction Act last week, the bill praised for its intent to protect college students' financial interests is under the threat of a veto from President Bush. The bill would cut federal subsidies to student loan lenders nearly $20 billion over the next five years. With the saved money, the bill would increase funding for Pell Grant scholarships, help stabilize tuition and halve the interest rate of federally subsidized college loans, among other provisions. The White House said savings from cutting the federal subsidies to loan lenders should be spent on need-based aid for students currently enrolled instead of cutting interest rates, which would create a set of expensive federal programs to assist students who for the most part have already graduated.
Proposed FFELP Cuts Would Be "Severe," New Analysis Says
WASHINGTON, July 18 /PRNewswire/ -- "The die has yet to be cast-the potential catastrophic impact of the proposed $18 billion cuts in student loans can be averted," Kevin Bruns, executive director of America's Student Loan Providers, said in response to independent analysis released today by Mark Kantrowitz, Publisher of FinAid.org. The study examines proposed cuts to the Federal Family Education Loan Program (FFELP). "This new independent analysis speaks for itself," Kevin Bruns said. "Kantrowitz's examination exposes the irrationality of making severe cuts in lender payments when margins are already thin and much rides on FFELP's continued operation as a source of low-cost college loans." The new analysis (http://www.finaid.org/educators/2007subsidycuts.txt) is largely consistent with a recent report by the Congressional Research Service, concluding that Sallie Mae's after-tax margin was less than a half a cent on the dollar (excerpt below).
Congressman Carnahan Praises US House Passage of College Aid Bill
St. Louis area Congressman Russ Carnahan (D-MO) says H.R. 2669, the College Cost Reduction Act of 2007, would boost scholarships and reduce loan costs at no new taxpayer expense. The legislation, which he calls the largest single investment in college aid since the GI Bill in 1944, would raise college financial aid by about $18-Billion throughout the country over the next five years, providing an increase of $340-Million in loan and Pell Grant aid to Missouri students and families over that time period. The legislation pays for itself by reducing federal subsidies paid to lenders in the college loan industry. Those lenders will also reduce their interest rates from 6.8 percent to 3.4 percent. The bill now heads to the Senate, where Carnahan hopes it will pass by the start of the new academic year.
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