Inspector General Launches Investigation Requested by Chairman Miller into Education Department, Lender Conflicts of Interest

Friday, May 4, 2007

WASHINGTON, DC -- The Inspector General for the U.S. Department of Education has launched an investigation requested by U.S. Rep. George Miller (D-CA) into the potential conflicts of interest among Department employees, lenders, and other participants in the federal student loan programs. John P. Higgins Jr., the Department's Inspector General, wrote to Miller yesterday to inform him that his office had agreed to Miller's request, and had already taken steps to begin their probe.

Miller, the chairman of the House Education and Labor Committee, who is conducting his own investigation into the student loan industry, called for the independent investigation on Thursday, April 26, after recent news reports revealed that several Department officials responsible for administering federal student aid either held stock in or had close ties to some of the nation's largest student loan companies.

"I am very pleased by the Inspector General's decision to thoroughly examine any potential conflicts of interest within this industry," said Miller. "The Department of Education has an incredibly important responsibility to administer and safeguard our nation's federal education programs. No one involved in running these programs should be engaging in any relationships or personal arrangements that could undermine or abuse programs that help students and their families pay for college. Students, families, and the American public deserve to know whether the public officials who have been entrusted with these programs are truly acting in the best interests of students and taxpayers, or for their own financial benefit."

Just last week, New York Attorney General Andrew Cuomo testified at a committee hearing that the Department of Education's lack of oversight over student loan programs has allowed corrupt practices and conflicts of interest to flourish within the system. U.S. Education Secretary Margaret Spellings is scheduled to testify before the committee about the Department's oversight of the federal student loan and Reading First programs on Thursday, May 10, 2007.

To view Miller's letter to the Inspector General, click here.

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FOR IMMEDIATE RELEASE
Contact: Tom Kiley / Rachel Racusen
2181 Rayburn House Office Building
Washington, DC 20515
202-226-0853