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College loan inquiry extends to Florida schools
By TOM MARSHALL
Published May 4, 2007
A widening investigation into student lending practices is reaching Florida universities for the first time.
New York Attorney General Andrew Cuomo on Thursday issued subpoenas and letters to 90 alumni associations across the country that he believes steer students toward loan consolidation companies.
Among that group are some Florida schools, said Cuomo spokesman John Milgrim.
"I can't tell you which ones yet, because they haven't gotten the subpoenas yet, " he told the Times.
All of the alumni groups being targeted have agreements or relationships with the Nebraska-based Nelnet lender.
Cuomo is seeking to learn whether the groups that endorsed the company received any benefits or payments in exchange, Milgrim said.
Nelnet had no immediate comment.
On its Web site, the company lists six "Nelnet Alumni Partners" in Florida: the University of South Florida, the University of Tampa, Florida International University, Florida Coastal School of Law and Embry-Riddle Aeronautical University.
Milgrim said all of those alumni groups were "not necessarily" receiving subpoenas.
Since March, Cuomo has targeted lenders and colleges for their revenue sharing agreements, threatening lawsuits for deceptive business practices or fraud involving students with homes in New York.
Congress and the federal Department of Education have since launched separate inquiries into the $85-billion college loan industry.
Cuomo said he has found cases of colleges getting a percentage of loan proceeds or "kickbacks" from lenders granted preferred status by the schools.
Eight schools, including New York University and the University of Pennsylvania, have agreed to reimburse students for money they earned off loans but didn't disclose to students.
Information from the Associated Press was used in this report. Tom Marshall can be reached at firstname.lastname@example.org or (352) 848-1431.