By Dan FletcherThe Daily Northwestern
In light of a recent national student loan scandal, Northwestern officials said they don’t receive kickbacks from any student loan companies on the university’s list of preferred lenders.
Universities typically provide this list to give students recommendations of companies with which to help finance their education. These lists have come under fire recently as investigators uncovered evidence that officials at some major universities received compensation from loan companies in exchange for a recommendation. In some cases, the schools themselves received a portion of the revenues from loans to their students.
Mike Mills, associate provost for university enrollment, said no one at NU gets anything from the five companies on the Office of Financial Aid’s preferred lending list. NU’s preferred lenders are Access Group, Edamerica, CitiBank, Wells Fargo and Sallie Mae Education Trust.
“Northwestern does not have any formal contractual agreements with these lenders, and Northwestern does not mandate that students and their families use these lenders,” Mills said.
Sallie Mae, the nation’s largest provider of student loans, reached a settlement with the State of New York on April 11. The agency agreed to stop providing perks to financial aid officials and to refrain from entering into revenue-sharing agreements with any more schools.
Six schools, including the University of Pennsylvania and New York University, had revenue sharing agreements with Sallie Mae and have agreed to give some of the money earned back to the students.
Although Sallie Mae is one of five companies on Northwestern’s preferred lending list, Alan Cubbage, vice president for university relations, said the company is there because the university deemed it a good option for students, not because of any kickbacks.
“These lenders have to go through a competitive review process to get on the list,” he said. “There’s no sort of quid pro quo going on.”
Cubbage said the university provides the list as a service to students and parents, and he said no change is necessary in university procedure.
“We try to prequalify lenders that will do a good job for students, but we’ll take loans from anyone,” he said. “If a student wants to go get a loan from their local bank, we’ll gladly accept it.”
At no point in NU history has anyone in the university’s administration ever received benefits from companies for putting their name on the list, Cubbage said.
Since the scandal broke, the Office of Financial Aid has updated its preferred lender list online with a message outlining how it was created. The message says financial aid companies are evaluated by officials from financial aid offices at each of NU’s schools, and the final list is approved by university administrators. The process is repeated every two years.
Carolyn Lindley, university director of financial aid, declined to comment about the list.
The Associated Press contributed to this report.
Reach Dan Fletcher at [email protected].
