Report: University of Nevada, Reno Alumni Group Paid by Loan Firm

The alumni association at the University of Nevada, Reno received money from a student loan consolidation company in exchange for names of alumni and exclusive rights to UNR's logo in promotional material, the Las Vegas Review-Journal reported.

Over the past four years, UNR's alumni association received $88,400 from Nelnet Inc., the nation's second-largest student loan consolidation company, according to the New York Attorney General's Office, which has been investigating ties between student loan lenders, universities and administrators.

On Wednesday, New York Attorney General Andrew Cuomo announced an expansion of the probe to include whether top college athletic departments steered athletes and other students to loan companies in exchange for kickbacks.

No Nevada schools were among 39 nationwide served with subpoenas
and requests for documents in that aspect.

In the Nelnet case, the company reached a settlement with Cuomo's office to sever ties to alumni associations and pay $2 million toward a fund to educate students about their loan options.

UNR's alumni association was one of about 120 nationwide found to have received money under a deal with Nelnet, the Review-Journal
reported. The alumni association at the University of Nevada, Las Vegas was not involved in the Nelnet case.

John Carothers, UNR vice president for development and alumni relations, said the association received bids four years ago from other student loan consolidation companies that also offered to make payments in return for an endorsement.

Carothers said the alumni association didn't steer former students toward Nelnet services, and taking money from the lender was viewed as a licensing arrangement similar to letting credit card companies use the school's logo.

The decision to endorse Nelnet was based on the company's benefits to alumni and its alumni association, he said.

But unlike Nelnet's promotional materials, credit card companies disclose that the alumni association receives money for each person
who signs up for their card.

Carothers said the alumni association will not sign any new agreements with student loan consolidation companies.

(Copyright 2007 by The Associated Press. All Rights Reserved.)


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