August 1, 2007
Athletic Departments Subpoenad on Student Loan Probe
This should get interesting – many college students grumble that athletic scholarship students eat from a silver spoon compared to the rest of the student body. There were kids at my college with sweet deals, yet they nearly failed out of school. I wonder what this will lead to! Read the article from USA Today here.
Student-loan probe widens to athletic departments
A press release from N.Y. Attorney General Andrew Cuomo: “Opening a new chapter in his ongoing investigation into the student loan industry, New York State Attorney General Andrew M. Cuomo today served subpoenas and document requests on 39 universities seeking information on deals their athletic departments made with a student loan provider. …
“Cuomo is investigating whether athletic departments at these universities agreed to promote SFS loans to students in exchange for kickbacks.”
The upshot of the broader investigation, from an April USA TODAY story: “More than 90% of student borrowers choose a lender recommended by their college’s financial aid office. But Cuomo’s investigation found that some lenders gave stock options and all-expense-paid trips to financial-aid administrators. And he alleged that those favors helped the lenders secure a place on the colleges’ ‘preferred-lender’ lists.”
Several universities and lenders have agreed to cease and desist, often paying toward an education fund Cuomo intends to use to inform students and parents of their options. Cuomo’s site rounds up the settlements and other actions.