Loan Company To Sever Ties To UCO Alumni Group, Others

Friday, July 27th 2007, 7:39 am

By: News On 6

OKLAHOMA CITY (AP) -- A student loan consolidator will sever ties to the University of Central Oklahoma Alumni Association and 110 other alumni groups that were rewarded when new members used the company's services.

The decision by Nebraska-based Nelnet comes amid a crackdown by New York Attorney General Andrew Cuomo's office that focuses on questionable student lending practices. Nelnet paid the groups for pitching their loans to members, which Cuomo said amounted to kickbacks.

Stacy McNeiland, executive director of the association, said alumni knew the association would be rewarded if they signed up.

"Our students knew they could consolidate their student loan debt at an affordable rate and help the alumni association at the same time," McNeiland said. "Mostly, we are disappointed for our students because they really benefited from the products that
Nelnet provides."

McNeiland said the UCO Alumni Association is not under investigation by Cuomo or other agencies.

More than 900 UCO alums consolidated their loans through the three-year Nelnet partnership, McNeiland said. Confidentiality agreements prevented her from disclosing how much money the association made, she said.

Another investigation by Cuomo's office involved College Loan Corp., with which his office recently reached a settlement.

A Langston financial aid officer accepted travel, entertainment and meal perks from the student loan company before advocating that lender on a preferred list for students, the investigation claimed.