Student loan inquiry widens on Capitol Hill

WASHINGTON — Congressional leaders probing the $85-billion student loan market pushed into new areas Thursday, raising concerns about loan collection tactics and seeking an inquiry into possible conflicts of interest inside the Education Department.

Sen. Edward M. Kennedy (D-Mass.), chairman of the Senate education committee, wrote to the heads of two major student loan firms, expressing concerns about allegedly abusive loan collection tactics.

“I am concerned that several private lenders may be engaging in harsh and inappropriate tactics with regard to borrowers whose payments are overdue ... tactics that are prohibited by federal law and regulations,” Kennedy wrote in a letter to Tim Fitzpatrick, chief executive of Sallie Mae, the nation’s largest student lender.

Kennedy also wrote a letter highlighting such concerns to Michael Dunlap, CEO of Nelnet Inc., another student lender.

Separately, Rep. George Miller (D-Martinez), the chairman of the House education committee, on Thursday asked for an internal inquiry at the Education Department into possible conflicts of interest among department employees, lenders and others.