Report: JPMorgan Chase Paid Student-Aid Officers
REBECCA ROBERTS, host:
Secretary of Education Margaret Spellings testifies before Congress today about her efforts to stem improprieties in the student loan industry.
NPR's Larry Abramson reports.
LARRY ABRAMSON: The House Education and Labor Committee says it has evidence that JPMorgan Chase paid five student aid officials to do work for the bank while they were still on their school's payroll. JPMorgan Chase confirmed it did pay school officials to do work related to student loans, but the bank says it doesn't do that kind of thing anymore.
The company says it has also stopped throwing lavish parties for university officials, like the $70,000 cruise in New York Harbor that student aid officers enjoyed in 2005.
California Democrat George Miller, chair of the House Education and Labor Committee, says that even though conflicts of interest are pervasive in the industry, it wasn't his words particularly egregious that lenders would put active loan officials on the payroll.
Miller is expected to grill Secretary of Education Margaret Spellings about why her agency didn't do more to put some distance between lenders and schools. Spellings can be expected to defend her actions, and has appointed an internal task force on the matter. The House passed legislation yesterday meant to bar conflicts of interest and to mandate more openness about ties between schools and lenders.
Larry Abramson, NPR News, Washington.
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