Federal Overseer Of Student Loans Invested in Lenders
She Owned Stock in 5 Large Firms

By Amit R. Paley
Washington Post Staff Writer
Saturday, April 21, 2007

The No. 3 official in the U.S. Department of Education, who oversees the student loan industry, had more than $10,000 invested in student lenders, according to documents released last night.

Sara Martinez Tucker, the agency's undersecretary responsible for financial aid and higher education, reported the shares in financial disclosure forms filed in October 2006 and released yesterday in response to a request from The Washington Post.

The department said she had not violated any ethics rules, which prohibit employees from working on matters involving a company in which they hold more than $15,000 in stock. The forms show that Tucker held $2,745 in Bank of America, $2,597 in Citigroup, $1,923 in Wells Fargo, $1,134 in J.P. Morgan Chase and $1,615 in Wachovia. Those companies are five of the six largest student lenders.

The disclosure comes in the midst of a widening student loan scandal exposing financial ties among lenders, universities and government officials. Matteo Fontana, another department official who helped oversee the $85 billion-a-year industry, was suspended this month after revelations that he held more than $100,000 worth of stock in a single loan company.

Martinez Tucker, who declined to comment through a spokeswoman, was confirmed by the Senate late last year. She previously was president of the Hispanic Scholarship Fund, which has awarded scholarships to about 78,000 students. Before that she was an executive at AT&T.

"Sara Martinez Tucker is a public servant of the highest ethics and integrity," said Katherine McLane, a department spokeswoman. "She has helped thousands of Hispanic Americans afford college, and we are so fortunate to have her working on behalf of all America's students."