Senate digs up more evidence of conflicts in school-loans investigation
By Nancy Zuckerbrod
Associated Press Education Writer
WASHINGTON — Internal student loan industry documents unveiled yesterday provide further evidence of conflicts of interest between banks and colleges or school officials.
Sen. Edward M. Kennedy, D-Mass., chairman of the Senate education committee, released the documents as part of an ongoing investigation into the industry. The findings were similar to those of New York Attorney General Andrew Cuomo, whose investigation has turned up quid-pro-quo relationships between schools or college financial aid officials and lenders.
The documents released by Kennedy yesterday included:
Investigators also found evidence of conflicts through interviews with industry and college officials, according to a report accompanying the documents.
In one case, the report noted that a Nelnet sales representative suggested to a University of Maryland official that it label the company a preferred lender after Nelnet sponsored an event. The university official rejected the request, according to the report.
The report also highlighted cozy relations between lenders and alumni associations. By making donations to the associations, banks can market to graduates who may opt to consolidate their loans, the report stated.
