This is an archived page. Images and links on this page may not work. Please visit the main page for the latest updates.

 
 
 
Read my book, TEACHING BEAUTY IN DeLILLO, WOOLF, AND MERRILL (Palgrave Macmillan; forthcoming), co-authored with Jennifer Green-Lewis. VISIT MY BRANCH CAMPUS AT INSIDE HIGHER ED





UD is...
"Salty." (Scott McLemee)
"Unvarnished." (Phi Beta Cons)
"Splendidly splenetic." (Culture Industry)
"Except for University Diaries, most academic blogs are tedious."
(Rate Your Students)
"I think of Soltan as the Maureen Dowd of the blogosphere,
except that Maureen Dowd is kind of a wrecking ball of a writer,
and Soltan isn't. For the life of me, I can't figure out her
politics, but she's pretty fabulous, so who gives a damn?"
(Tenured Radical)

Thursday, April 05, 2007

If You're After Someone...

...who deeply understands the following, find another blog. UD's notoriously weak on numbers, banking, and business law. But, as the kind reader who sent her this Los Angeles Times article about corruption at Pepperdine, Columbia, and the University of Southern California notes, this stinks in a big way.

Financial aid officers at those schools (we'll probably hear about other schools as the story develops) are being paid off by lending firms in exchange for promoting the firms to students:

Catherine Thomas, a USC associate dean and financial aid director [may have] "engaged in deceptive practices or other illegal conduct in connection with her dealings with Student Loan Xpress Inc."

The development reflected a broadening of [an] investigation into how financial companies in the $85-billion-a-year college loan industry win their business from universities. It also came the same week that a group of universities accused of taking improper payments from lenders reached an agreement ... requiring them to pay back $3.27 million to students.

According to New York officials, authorities are reviewing whether Thomas improperly received 1,500 shares of stock in Educational Lending Group, the former parent company of Student Loan Xpress.

The letter from [Attorney General] Cuomo's office stated that New York officials "are deeply concerned" that Thomas may have received the shares in exchange for placing Student Loan Xpress on the university's preferred lender lists or to influence her to place the company on the lists.

... The New York attorney general's office said Thomas and a partner sold the 1,500 shares in September 2003 for about $14,250, or $9.50 a share. It was not indicated how much Thomas paid for her shares, but one official noted that another higher education administrator involved in the same Cuomo investigation — David Charlow, a senior associate dean at Columbia University in New York — is believed to have acquired his securities for as little as $1 a share.

Charlow, who authorities said received far more of Educational Lending Group's securities and who is believed to have realized more than $100,000 in profits, has been placed on leave by the university. Cuomo's office has subpoenaed records from Columbia related to Charlow's activities.

USC was not subpoenaed, but it and the University of Texas at Austin — where Larry Burt, an associate vice president, also acquired and later sold 1,500 shares of Educational Lending Group — were sent "document retention" letters.

The letter to USC asked the university to arrange to provide documents related to the New York investigation and to determine whether "any other financial aid officers received any payments, stock or other benefits from any other lending institutions." It also asked USC to provide documents showing how the university selected its preferred lenders over the last six years.

... The New York investigation already has prompted another Southern California university, Pepperdine, to alter its practices. Two weeks ago Cuomo accused Pepperdine, among other universities, of accepting what amounted to kickbacks from San Francisco-based Education Finance Partners in exchange for steering students to the company's loans.

Jerry Derloshon, a spokesman for the Malibu campus, said Wednesday that Pepperdine officials believed their practice was legal and appropriate but that the school has "acted quickly to end the revenue-sharing relationship … because any appearance of impropriety was not something we wanted to deal with."

He said the university in the future also would more clearly disclose any other business relationships it has with preferred lenders.