Student Loan-Gate Plot Thickens

The New America Foundation first reported that Matteo Fontana sold over $100K of Student Loan Xpress stock while he was overseeing lenders at the Department of Education. This story made it to the Times today.

What none of the stories mention is that before he became a government employee, Fontana used to work for Sallie Mae. (Here's a book he wrote about using technology at Sallie Mae). He's one of the gaggle of Sallie Mae execs who followed their boss Theresa Shaw through the revolving door into much lower-paid Department of Ed gigs after Bush's election-- others are , Michael Sutphin, Joseph Esposito (an attorney for Sallie Mae), Gerald T. Schubert, and Marianna O'Brien. They helped make the atmosphere at the department very unfriendly to Direct Loans, in favor of loans made by lenders like Sallie Mae and Student Loan Xpress. According to one inside source, "[before promoting Direct Loans] you had to ask permission to go to the bathroom, and you never, ever, got it."

Maybe we should look into the stock holdings of these other industry-insider "public servants" and see what turns up.