Cairo Association of Teachers - Newsletter

CAT Tracks for August 2, 2007 STUDENT LOAN PROBE

From the WSIL TV Channel 3 website...

SIU Involved in Nationwide Probe

By: Shawn Smetana

SOUTHERN ILLINOIS UNIVERSITY -- New York's Attorney General wants to know if 40 universities including SIU promoted a certain loan company to student athletes in exchange for kickbacks. No charges have been filed, but SIU is being asked to hand over all documents regarding it's contract with that company called Student Financial Services.

SIU athletics have been a point of pride for the university over the past few years. From the nationally ranked football team to the sweet sixteen basketball squad, but this is not the kind of attention the university looks for.

The New York Attorney General's office wants to know if athletic departments checked on company interest rates before recommending the loans to students, or if they simply agreed to the endorsement based strictly on payments from the lending company. The contract provided by the Attorney General says the contract calls for a University to receive 75 dollars for every student that signs up with the lending company. If that's the case, the office says the contract would be considered revenue sharing, a violation of federal law.

SIU Spokesman Rod Sievers says the university did enter into a contract with University Financial Services in August 2006. He says the university agreed to put out flyers at football games promoting the loan company. Sievers says the company got no response from students and SIU terminated the contract after three home games.

He says SIU did not consider the company a University endorsed preferred lender something this probe is checking into.

Sievers says no money changed hands in the short time University Financial advertised at SIU games.

The Attorney General's office is asking for all records involving the contracts as well as documents showing whether the athletic department compared rates with other lenders and a list of all benefits-- if any-- given to university employees from the loan company.

Sievers says the University will cooperate fully with the subpoena.