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Two Officials Suspended Over Student Aid Ties

By Amit R. Paley
Washington Post Staff Writer
Wednesday, April 11, 2007

Two financial aid directors were suspended yesterday after revelations about their financial ties to a student loan company that their universities had recommended to student borrowers.

Widener University in Pennsylvania placed Walter Cathie, an assistant vice president for finance, on administrative leave after New York state investigators disclosed that Student Loan Xpress paid $80,000 to a business Cathie runs. They also said Cathie agreed to market the lender to graduate schools in exchange for a cut of the profits.

Capella University, an online school based in Minnesota, placed financial aid director Timothy C. Lehmann on leave during an internal probe of $12,400 he received last year to develop a business plan for Student Loan Xpress, school spokeswoman Irene Silber said. Neither Cathie nor Lehmann could be reached for comment.

Also yesterday, a U.S. Education Department spokeswoman said the financial aid director at the University of Texas at Austin resigned from a committee created by Congress that advises the education secretary on student aid policy. The official owned shares in the loan company.

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