2008 Woodie Awards
Report: CMU accepted extra money from student loan providers
Athletics department, alumni association received additional money per completed application, documents say
Issue date: 8/1/07 Section: News
- Page 1 of 1
CMU's athletics department and alumni association received extra money from student loan providers for completed loan applications, according to an Aug. 2 report by the Detroit Free Press.
According to documents the Free Press obtained, University Financial Services, a Florida-based loan provider, paid CMU's athletics department $10,000 per year, plus $75 per completed loan application it received after 150.
In addition, Nebraska-based Nelnet paid CMU's alumni association $20,000 when their agreement was signed, including $20,000 per year and an additional $100 for each completed loan application after 250.
Both UFS and Nelnet are under investigation for providing kickbacks, payments for loan applications and other perks to universities in exchange for advertising their loans to students. Such actions are violations of federal law.
CMU is among three Michigan universities and 40 nationwide that were subpoenaed Wednesday for their affiliation with UFS.
The New York Attorney General's office asked the university, as well as Wayne State University and University of Detroit-Mercy, to turn over documents relating to UFS and the relationship it has with its athletic department.
The Attorney General's office is investigating whether agreements between any of the 40 universities and UFS were based on revenue sharing and kickbacks.
Steve Smith, director of media relations at CMU, said the university has had a relationship with UFS for about a year.
He said the university received the subpoena Wednesday via fax.
"Our general counsel (Eileen Jennings) is reviewing it," Smith said. "Depending on what her recommendations are, that's how we'll proceed."
The investigation stemmed from a deal between UFS and Dowling College in New York in which Dowling's athletic department received $75 for each loan application UFS received.
In return, UFS advertisements were placed on Dowling's athletics Web site and department interns distributed promotional materials at events.
As of Thursday, CMU's athletics Web site features a similar advertisement from UFS that says: "Save money! Lower your student loan payments by as much as 50%."
Smith said removing the advertisement is something the general counsel will discuss during the review.
Athletics director Dave Heeke was unavailable for comment as of Thursday afternoon. But in a Aug. 2 Detroit News story, Heeke is quoted as saying: "Sure, we're concerned about it. They are one of our Web site advertisers and we have a sponsorship agreement with them. To my understanding they have paid a lump-sum fee and nothing more."
Check cm-life.com for further updates on this story.
According to documents the Free Press obtained, University Financial Services, a Florida-based loan provider, paid CMU's athletics department $10,000 per year, plus $75 per completed loan application it received after 150.
In addition, Nebraska-based Nelnet paid CMU's alumni association $20,000 when their agreement was signed, including $20,000 per year and an additional $100 for each completed loan application after 250.
Both UFS and Nelnet are under investigation for providing kickbacks, payments for loan applications and other perks to universities in exchange for advertising their loans to students. Such actions are violations of federal law.
CMU is among three Michigan universities and 40 nationwide that were subpoenaed Wednesday for their affiliation with UFS.
The New York Attorney General's office asked the university, as well as Wayne State University and University of Detroit-Mercy, to turn over documents relating to UFS and the relationship it has with its athletic department.
The Attorney General's office is investigating whether agreements between any of the 40 universities and UFS were based on revenue sharing and kickbacks.
Steve Smith, director of media relations at CMU, said the university has had a relationship with UFS for about a year.
He said the university received the subpoena Wednesday via fax.
"Our general counsel (Eileen Jennings) is reviewing it," Smith said. "Depending on what her recommendations are, that's how we'll proceed."
The investigation stemmed from a deal between UFS and Dowling College in New York in which Dowling's athletic department received $75 for each loan application UFS received.
In return, UFS advertisements were placed on Dowling's athletics Web site and department interns distributed promotional materials at events.
As of Thursday, CMU's athletics Web site features a similar advertisement from UFS that says: "Save money! Lower your student loan payments by as much as 50%."
Smith said removing the advertisement is something the general counsel will discuss during the review.
Athletics director Dave Heeke was unavailable for comment as of Thursday afternoon. But in a Aug. 2 Detroit News story, Heeke is quoted as saying: "Sure, we're concerned about it. They are one of our Web site advertisers and we have a sponsorship agreement with them. To my understanding they have paid a lump-sum fee and nothing more."
Check cm-life.com for further updates on this story.
Viewing Comments 1 - 3 of 3
Jason Ogden
posted 8/03/07 @ 12:53 PM EST
This explains why my mailbox was plagued with snowdrifts of Nelnet student loan junk all the freaking time. CMU should be ashamed to have been involved in this. (Continued…)
Andrew
posted 8/13/07 @ 3:17 AM EST
Who cares...obviously with all the budget issues we have been having they didn't take enough!!!!
bob
posted 8/13/07 @ 3:13 PM EST
Send CMU to jail and do not pass go!
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