The financially troubled Connecticut Student Loan Foundation is a few members short on its board of directors -- because nine of the 14 board members resigned en masse on Tuesday.
They stepped down after legislative leaders failed to grant their request for indemnity to protect them from lawsuits. The nine who resigned are all volunteers appointed by the governor or legislators, and say they can't continue to serve without protection from legal action.
The remaining five board members are appointed by state statute and are protected from personal liability.
Gov. M. Jodi Rell made a push last week to have the General Assembly grant the board members legal protection, but some lawmakers felt if the board had immunity, the state could be sued instead.
"It's unfortunate that it came to this, but the legislature was unwilling to give the directors of the Connecticut Student Loan Foundation the protections that the members of any other state board or commission enjoy. The foundation members understandably felt that they had no other recourse," Rell spokesman Rich Harris told the Hartford Courant.
The Connecticut Student Loan Foundation is a nonprofit corporation that administers, guarantees, finances and serves student loans within the federal loan program.
Rell had replaced six appointees to the foundation in March after state auditors sharply criticized the foundation for handing out raises and bonuses to executives and spending thousands of dollars on parties, golf club memberships and other perks while facing multimillion-dollar deficits.
