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College scandal hits UW schools
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by Cassie Kornblau
Wednesday, April 18, 2007
The University of Wisconsin-Oshkosh received nearly $10,000 this year from a student loan company after placing them on the university's list of preferred lenders, according to a report by the Milwaukee Journal Sentinel Tuesday.
The student loan company, Education Financial Partners, represented a large percentage of total loan volume at UW-Oshkosh, and the revenue-sharing agreement allowed the university to pay for the additional cost of office supplies and software for the financial aid office.
However, after New York Attorney General Andrew Cuomo discovered that colleges were receiving financial kickbacks from student loan companies, relationships between financial aid officers and lending companies have come under increasing scrutiny.
On Monday, The New York Times reported Education Finance Partners settled a $2.5 million agreement with Cuomo over a similar revenue sharing arrangement that required the company to refund the fees they received from students at Fordham University and St. John's University, both of which used the company for student loans.
Beatriz Contreras, financial aid director at UW-Oshkosh, told the Milwaukee Journal Sentinel that she asked Education Finance Partners to stop making payments to the institution because she wanted to avoid the ethical gray area this relationship appeared to present for the university.
Contreras said UW-Oshkosh did nothing wrong by accepting payments from the student loan company and added Education Finance Partners would have been placed on the school's preferred lender list even without revenue sharing.
Kathleen Sahlhoff, director of financial aid at UW-Eau Claire, said Education Finance Partners came and talked to the university about the product, but the office turned them down.
"The product they had just wouldn't fit our needs and wouldn't work for us," Sahlhoff said in an interview with The Badger Herald. "The only arrangement they would do requires us to make them the one and only loan lender."
Sahlhoff said at Eau Claire, 92 percent of all loans are not through private lenders but the direct source.
However, if students need additional funding for their education, Sahlhoff said, "we just felt it would be a service to the students to point out the best loans [and] determine a private lender list."
Sahlhoff added students are still able to choose from any student loan company they may want because it offers them the best rate.
Although UW-Eau Claire has no agreement with Education Finance Partners, Sahlhoff owns stock in one of the university's preferred lenders, according to the review by the Journal Sentinel.
When interviewed by The Badger Herald, Sahlhoff said, "I have never been offered the opportunity to own stock by the company as an incentive."
At UW-La Crosse and UW-Green Bay, financial aid administrators have been defending an all-expense-paid trip sponsored by one of their preferred lenders, Edamerica.
"It was a professional opportunity for our staff to help better serve students," Sue Keihn, associate provost for student services and dean of students at UW-Green Bay, told the Journal Sentinel.
Louise Larson Janke, director of financial aid at UW-La Crosse, said the purpose of the trip for staff members was to determine whether to allow Edamerica to process student loans.
In the end, Janke said UW-La Crosse decided not to use Edamerica or Education Finance Partners when they inquired.
— The Milwaukee Journal Sentinel contributed to this report.
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