Editorial: Turning a blind eye

Thursday, May 3, 2007 | 7:23 a.m.

The Bush administration squelched a proposed policy in 2001 that sought to restrict the student loan industry after accusations that lending companies had offered financial gifts to universities to get students' business - practices that only now are being investigated.

The Washington Post reported on Monday that Education Department officials wrote the proposal toward the end of the Clinton administration and circulated it after Bush took office, but the Bush administration killed the proposal.

Democrats and consumer advocates told the Post that rejecting the 2001 proposal is exactly the kind of lenient and conflict-ridden federal oversight for which the Bush administration has become known. More than a dozen of Bush's senior Education Department officials either worked in the student loan business before joining the agency or have taken well-paid jobs in the industry after leaving the agency, the Post reports.

University systems in Texas and California are investigating the relationships between schools and lending companies, and the New York attorney general is probing the industry in that state. Questionable practices include routing students' financial aid inquiries directly to lending companies without telling students, and lending companies paying universities based on the amounts their students have borrowed.

It is disheartening - but not surprising - that these practices, which were dubious as far back as 2001, have been allowed to flourish under Bush. But they must stop.