Three universities have suspended top financial aid administrators after revelations that they owned stock in "preferred" lenders that are recommended to student borrowers and their parents. The Department of Education is also reviewing an official's stake in a lender the department oversees.

Thursday, the University of Texas and the University of Southern California announced they had placed top financial aid officials on administrative leave pending an investigation into the officials' stock ownership in Student Loan Xpress, a unit of CIT Group. This follows Columbia University's suspension earlier this week of a top financial aid official...

An official with the U.S. Department of Education has also owned shares in Student Loan Xpress, according to Securities and Exchange Commission filings. The official, Matteo Fontana, oversees lenders that participate in the Federal Family Education Loan Program and is related to Student Loan Xpress' president, according to the New America Foundation, a non-partisan think tank...

The developments raise questions about whether students are being inappropriately referred to lenders...

Michael Dannenberg, director of education policy at New America Foundation — which first reported about the university officials' ownership of the stock options — says there's a "fundamental conflict of interest. … No financial aid officer should own stock in a student-loan company, especially one which its parent college recommends..."

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