The relationship between Ohio University and a student loan lender has garnered the attention of the New York Attorney General's office.
Ohio and 39 other schools received subpoenas demanding all information connecting the school to the Florida-based University Financial Services (UFS), a student loan lender, according to a press release from Andrew Cuomo, New York attorney general.
The investigation stems from the discovery of UFS' relationship with Dowling College in Oakdale, N.Y. Dowling's athletic director had set up a revenue sharing agreement in which the school earned $75 for each loan application directed to UFS from the athletic department. Dowling's Web site even provided a link to the student lenders' Web site.
Ohio University's athletic Web site, ohiobobcats.com, also features a link to a UFS sponsored Web site. The link, which promises lower student loan payments
sends the user to a UFS Web site sporting green and white text that reads, Go Bobcats!
The school's Web site also displays a UFS toll-free phone number that substitutes GO OHIO for six of the digits.
The relationship that University Financial Services Inc. has with Ohio University's Athletics department is completely legitimate according to a university press release. The athletics department does not endorse the company's products or steer students to the company.
By alluding that a certain lender is a university's preferred lender or can provide the lowest rates without researching other lender's rates, schools could be taking part in deceptive business practices said Lee Park, a spokesman for Cuomo.
Park added that Cuomo's office has jurisdiction at OU because some New York residents attend the school. He added that it's still unknown if the school has done anything wrong.
We're just not to that point in the investigation
he said.
Calls to Ohio University Athletic Director Kirby Hocutt and the athletic department's media relations department were not returned by deadline.
School officials, however, did acknowledge receipt of the subpoena but did not offer any detailed statement.
We intend to cooperate fully and transparently with any investigation
said Sally Linder, university spokeswoman.
A similar investigation was launched by Ohio Attorney General Marc Dann in April, Linder said. Several universities, including Ohio, received an investigative inquiry demand letter
asking for any documents regarding relationships with lenders.
The Ohio University Alumni Association had a preferred lender relationship with the National Education Loan Network (Nelnet), a loan consolidation company. In return for plugging Nelnet on its Web site, the association receives $25,000 a year and an additional $100 for every completed consolidation application.
Nelnet recently announced it would no longer compensate universities in marketing agreements, in response to pending federal laws that would prohibit such relationships.
Calls to Attorney General Dann's office in regards to OU's part in the investigation were not returned.
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