New York State Attorney General Andrew Cuomo has issued subpoenas for 39 collegiate athletic departments in a probe of their relationships with student loan providers. At its most basic, this investigation is asking whether or not cash, kickbacks, gifts and other bribes or misleading measures were communicated between various student loan providers and the cited athletic departments.
Cuomo is investigating whether athletic departments at these universities agreed to promote SFS loans to students in exchange for kickbacks.
"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. Today's action is an important new step as we continue to examine the unethical conflicts that pervade the student loan industry.
"The Attorney General's office is specifically investigating whether athletic departments evaluated UFS interest rates before recommending their federal loans, or if their endorsement of UFS was based purely on payments from the lender. Such an arrangement would constitute revenue sharing, which is a violation New York state consumer protection laws, as well as a violation of federal law.
D-IA football schools named (prominent schools in bold): Arkansas State, Auburn, Bowling Green, Central Michigan, Colorado State, East Carolina, Florida Atlantic, Georgia Tech, Ohio, Oregon State, Rutgers, TCU, Tulane, Alabama-Birmingham, UCLA, UCF, Houston, Kansas, Louisville, Oregon, Pittsburgh, USF, UTEP. See link for complete list. Of note: USC and Texas have also been scrutinized in a similar probe, but to my knowledge it has not been linked to their athletic departments but rather the university-wide financial aid offices of the schools.
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It's good that athletic departments have an awareness of and working relationship with loan providers, but obviously there's a problem when that relationship gets too cozy and bad loan options are pressed upon students and student-athletes.