Amidst a nation-wide lenders’ scandal and multi-million dollar
investigation, reported on in last month’s ACA Newsletter-Education Europe
, a chief official of the U.S. Department of education has resigned. Theresa Shaw, responsible for overseeing the federal student loan programme, has stepped down in the midst of accusation that Education Department has been lax in regulating the practice of lenders. The Education Department has also received heat for its laissez faire attitude toward the millions of dollars in questionable subsidies
that loan companies have collected. Ms Shaw claims, however, that her resignation is unrelated.
The U.S.’ 85 billion dollar student loan industry has been under legal scrutiny for the past two months. Investigations by a high powered New York attorney have led to a chain of discoveries that lenders bribed universities to be placed on a list of lenders recommended to students
. The recent drama has raised concern about the ability of the Education Department to monitor the integrity of the student loan system and protect students from exploitation by lenders.
Department of education statementAttorney General Cuomo website