Post by jdsippin on Aug 2, 2007 7:04:10 GMT -5
this could get ugly....
www.miamiherald.com/588/story/190033.html
BY MICHAEL GORMLEY
Associated Press
New York Attorney General Andrew Cuomo is now investigating whether college athletic departments -- including those at Florida Atlantic University, University of Central Florida and University of South Florida -- steered athletes and other students to education lenders in exchange for kickbacks.
Cuomo said he served 39 universities with subpoenas and requests for documents about deals between athletic departments and Clearwater-based Student Financial Services, which operates as University Financial Services. He said he's looking at how team names, mascots and colors were used to suggest the company was the college's preferred lender.
''Promoting loans in exchange for money is a serious issue, especially when Division I schools already generate tremendous revenue from their student athletes,'' Cuomo said.
Cuomo began the investigation as an outgrowth of his national probe of student loan providers and college administrators, which he said uncovered a pattern of favoritism for lenders who provided kickbacks, ''revenue sharing'' plans, and trips and other gifts in exchange for designations as recommended lenders. Sometimes the colleges provided campus employees to staff telephone banks for lenders drumming up business.
In Florida, Attorney General Bill McCollum is looking into lending conflicts at the state's public universities and seven private colleges.
FAU's general counsel office received and is responding to Cuomo's request, spokeswoman Kristine McGrath said.
As of Wednesday evening, the general counsel at UCF had not reviewed the subpoena, said spokesman Chad Binette, who could not provide more details. The university has 14 days from Wednesday to respond.
USF spokesman Ken Gullette said Wednesday's document request is an extension of Cuomo's initial investigation. ''We have cooperated with inquiries earlier this year, and each time, we've been shown to run a clean ship,'' Gullette said.
Gullette said the university's TV and media rights partner, ISP Sports, has an ''arms-length'' advertising arrangement with UFS, but he could not provide more details.
Also on the list are some of the country's top athletic departments, including Auburn University, Ohio University and Texas Christian University.
The loan company couldn't immediately be reached for comment.
Cuomo said that during his first investigation, he found the athletic director of Dowling College on New York's Long Island entered into a revenue-sharing agreement with University Financial Services that paid the college $75 for every new loan application, gave exclusive marketing advantages on campus and allowed the lender to use the department's interns to disseminate its brochures.
Dowling ended the relationship with the company as part of its settlement of Cuomo's investigation.
The investigation has resulted in settlements and reforms with 12 lenders -- including Nelnet, Citibank, Sallie Mae, JP Morgan Chase and Bank of America -- and several colleges.
Cuomo has said the U.S. Department of Education has had weak oversight of the student loan industry, a view supported Wednesday in a report by the investigative arm of Congress.
The Education Department is supposed to make sure banks that participate in the federal student loan program aren't giving schools or school officials anything of value in exchange for getting business at a particular school.
But the department has not sought out cases of improper conduct, according to the report by the Government Accountability Office.
It found the department primarily responds to complaints, and doesn't even do a particularly good job of tracking those.
During the past 20 years, the department has only brought cases against two lenders. More often, department officials have written letters to lenders asking them to stop acting improperly.
The department recently issued proposed regulations to try to limit abuses by lenders. Those could become effective next year.
Associated Press Writer Nancy Zuckerbrod contributed to this report from Washington. Miami Herald staff writer Angela Tablac also contributed.
www.miamiherald.com/588/story/190033.html
BY MICHAEL GORMLEY
Associated Press
New York Attorney General Andrew Cuomo is now investigating whether college athletic departments -- including those at Florida Atlantic University, University of Central Florida and University of South Florida -- steered athletes and other students to education lenders in exchange for kickbacks.
Cuomo said he served 39 universities with subpoenas and requests for documents about deals between athletic departments and Clearwater-based Student Financial Services, which operates as University Financial Services. He said he's looking at how team names, mascots and colors were used to suggest the company was the college's preferred lender.
''Promoting loans in exchange for money is a serious issue, especially when Division I schools already generate tremendous revenue from their student athletes,'' Cuomo said.
Cuomo began the investigation as an outgrowth of his national probe of student loan providers and college administrators, which he said uncovered a pattern of favoritism for lenders who provided kickbacks, ''revenue sharing'' plans, and trips and other gifts in exchange for designations as recommended lenders. Sometimes the colleges provided campus employees to staff telephone banks for lenders drumming up business.
In Florida, Attorney General Bill McCollum is looking into lending conflicts at the state's public universities and seven private colleges.
FAU's general counsel office received and is responding to Cuomo's request, spokeswoman Kristine McGrath said.
As of Wednesday evening, the general counsel at UCF had not reviewed the subpoena, said spokesman Chad Binette, who could not provide more details. The university has 14 days from Wednesday to respond.
USF spokesman Ken Gullette said Wednesday's document request is an extension of Cuomo's initial investigation. ''We have cooperated with inquiries earlier this year, and each time, we've been shown to run a clean ship,'' Gullette said.
Gullette said the university's TV and media rights partner, ISP Sports, has an ''arms-length'' advertising arrangement with UFS, but he could not provide more details.
Also on the list are some of the country's top athletic departments, including Auburn University, Ohio University and Texas Christian University.
The loan company couldn't immediately be reached for comment.
Cuomo said that during his first investigation, he found the athletic director of Dowling College on New York's Long Island entered into a revenue-sharing agreement with University Financial Services that paid the college $75 for every new loan application, gave exclusive marketing advantages on campus and allowed the lender to use the department's interns to disseminate its brochures.
Dowling ended the relationship with the company as part of its settlement of Cuomo's investigation.
The investigation has resulted in settlements and reforms with 12 lenders -- including Nelnet, Citibank, Sallie Mae, JP Morgan Chase and Bank of America -- and several colleges.
Cuomo has said the U.S. Department of Education has had weak oversight of the student loan industry, a view supported Wednesday in a report by the investigative arm of Congress.
The Education Department is supposed to make sure banks that participate in the federal student loan program aren't giving schools or school officials anything of value in exchange for getting business at a particular school.
But the department has not sought out cases of improper conduct, according to the report by the Government Accountability Office.
It found the department primarily responds to complaints, and doesn't even do a particularly good job of tracking those.
During the past 20 years, the department has only brought cases against two lenders. More often, department officials have written letters to lenders asking them to stop acting improperly.
The department recently issued proposed regulations to try to limit abuses by lenders. Those could become effective next year.
Associated Press Writer Nancy Zuckerbrod contributed to this report from Washington. Miami Herald staff writer Angela Tablac also contributed.
