Ohio universities asked to supply info in student-loan probe

By JAMES HANNAH

Associated Press Writer

DAYTON, Ohio (AP) — Four state universities in Ohio have been asked to supply documents to the New York attorney general, who is investigating whether athletics departments agreed to endorse or steer students to a certain student loan company in exchange for kickbacks.

Ohio University, Bowling Green State University, Youngstown State University and Wright State University were among 40 schools nationwide asked to provide information because they have relationships with Student Financial Services Inc., which operates as University Financial Services.

New York Attorney General Andrew Cuomo began the investigation into athletic departments 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.

Jeff Lerner, spokesman for Cuomo’s office, said Thursday that if the schools received fees from the lender in exchange for promoting or steering students to the lender for loans, it could constitute revenue-sharing, which is illegal under federal law.

Lerner said any actions against the schools would be civil, not criminal. He said it could result in schools returning money they received from the lender or possibly paying fines.

Bowling Green did business with the lender for several months in the spring of 2006. School spokeswoman Kim McBroom said an employee in the athletics department entered into the marketing agreement without having the authority to do so.

The agreement was voided after the administration became aware of it, and the school returned the $7,500 it had received from the lender, McBroom said.

“To the best of our knowledge, no student participated in the loan program,” she said. “And we’ve had no further business with the company.”

Ohio University currently has a contract with University Financial Services that allows the lender to advertise to audiences at sporting events in programs, on the scoreboard and through other outlets.

“The university does not endorse the company’s products. It does not direct students to the company, and it does not partner with the company to provide any kind of student loans,” said university spokeswoman Sally Linder. “This is just a very well-established and appropriate way for a department to raise funds to support their mission and relieve pressure on a public university’s budget.”

At Wright State, University Financial Services pays the athletics department $10,000 to advertise student-loan consolidations on the department’s Web site.

University President David Hopkins said the lender simply pays for space like other sponsors. He said the company is not a preferred provider and that the athletics department doesn’t direct students to the lender.

Hopkins said the department would receive a small additional fee from the lender if student applications exceed 100 per year, but that hasn’t happened.

Youngstown State spokesman George McCloud referred questions to the Horizon League, in which the school plays.

League spokesman Will Roleson said the lender purchased an ad on the league’s Web site through a sports-marketing company, but that league officials did not steer any students to the lender.

Roleson said schools in the league could elect to put the ad on their Web sites if they signed an agreement with the sports-marketing company. He said he did not know if Youngstown State signed such an agreement.

Cuomo has asked the schools to supply the documents by Aug. 14.

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On the Net:

New York Attorney General: http://www.oag.state.ny.us