Not good news

[flsportsfan83]

UCF, USF among those subpoenaed as New York's Cuomo probes Division I colleges

Michael Gormley | The Associated Press

    4:46 PM EDT, August 1, 2007

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ALBANY, N.Y. - New York Attorney General Andrew Cuomo is now investigating whether college athletic departments nationwide -- including those at UCF, USF and Florida Atlantic -- steered athletes and other students to education lenders in exchange for kickbacks.

Cuomo said Wednesday that he served 39 universities with subpoenas and requests for documents about deals between athletic departments and Student Financial Services Inc., 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.

"Students trust their university's athletic departments because so much of campus life at Division I schools centers around supporting the home team," said Cuomo. "To betray this trust by promoting loans in exchange for money is a serious issue, especially when Division I schools already generate tremendous revenue from their student athletes."

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.

Cuomo's findings led to state and national reforms.

"Today's action is an important new step as we continue to examine the unethical conflicts that pervade the student loan industry," Cuomo said.

Ohio University spokeswoman Sally Linder said the school received a subpoena and will cooperate with Cuomo, as it did in a student loan probe by the Ohio Attorney General's office. She declined further comment until the university's lawyers review the subpoena.

"We feel confident what we are doing is above board," Linder said.

Spokesmen for Auburn and Texas Christian universities didn't immediately respond to requests for comment. 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, 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.

Cuomo's investigation has resulted in settlements and reforms with 12 lenders -- including Nelnet Inc., Citibank, Sallie Mae, JP Morgan Chase and Bank of America -- and several colleges, with $13.7 million in payments made to a national education fund to help high school students and their families more wisely and safely apply for student loans.

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, according to the report. 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. o

Associated Press Writer Nancy Zuckerbrod contributed to this report from Washington.

[bulls96go]

we are clean...!

[Joe]

I don't think this directly relates to athletics per se.

It does possibly explain more reasons for not wanted the arena name. However, I think this is more of a main campus administration problem.

[T-Man]

What a freaking joke...  If 39 colleges are accused of this many more are doing it....  In some way or fashion I am sure this goes on EVERYWHERE... Hell as a teacher I have certain mutual funds and other services that the district favors over others and we are offered them first.  I am sure that they are offered first for a reason..  What troubles me is the statement, "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."  So a can coosy or a gym bag with a lending institution name on it is illegal?  This is a witch hunt that does not need to be done at 39 universities, what makes this ass- clown narrow his search to just 39,,, What a Joke!

[crambone]

Not a big deal...we're kewl.

[Beancounter]

What a freaking joke...  If 39 colleges are accused of this many more are doing it....   In some way or fashion I am sure this goes on EVERYWHERE... Hell as a teacher I have certain mutual funds and other services that the district favors over others and we are offered them first.  I am sure that they are offered first for a reason..  What troubles me is the statement, "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."  So a can coosy or a gym bag with a lending institution name on it is illegal?  This is a witch hunt that does not need to be done at 39 universities, what makes this ass- clown narrow his search to just 39,,, What a Joke!

Agree, this is just political grand standing.  39 schools is about a third of Div 1 schools with football at least, so any impact would be minimal if any.  I would think ???

[Bulls 8_va]

Screw New York, what the hell say do they have on us anyway?  Cuomo can take that subpoena and stick it where the sun doesn't shine...

GO BULLS!!!

[smazza]

not what i wanted to see with my scrambled eggs at nate and al's this am

more bad ink for usf

[THEUSFFAN]

This may not be as big a deal as you think, but anytime a university uses the students as a way to generate direct income via their funding for education, this poses a problem.  The three keys in education are: the University, the student and the financing for tuition.  As students are the infrastructure to any institution and as finances are the infrastructrue to a student getting an education, you can see where this issue poses ethical dilemmas.

Universities should not have "preferred" lenders using school colors and/or logos.  This all goes with out saying or addressing the "kickback" issues.  It truly is bad ink for USF and it's athletics department.  Although the university may not reicieive any DIRECT income from that loan company, the rights holder (I believe it is that ISP deal??) pays the university with the revenue that they get from thier advertisers, hence UFS.

Not good.  We probably won't get in any trouble, but it is still....not good.