A student loan consolidation company that the Ohio University Alumni Association promotes is pulling out of its marketing agreements with over 100 alumni associations nationwide.
The National Education Loan Network (Nelnet), based in Lincoln, Neb., will no longer provide alumni associations with financial benefits in return for promotion of the company.
According to a Nelnet press release from July 31, the company also will contribute $2.0 million to a national fund for educating high-school seniors and their parents regarding the financial-aid process.
Proposed federal laws that would prohibit the company's marketing relationships with alumni associations contributed to Nelnet's decision, according to the press release.
In a letter dated July 19, 2007 sent to Ralph Amos, executive director of the Ohio University Alumni Association, Nelnet representative Mandy Franklin wrote, we see no option other than to cancel our existing affinity relationships.
According to the letter, Nelnet was to end its promotional ties with the Alumni Association on July 31.
The association has given Nelnet the names of alumni, permission to use its name and logo and has allowed Nelnet to advertise on the association's Web site.
Nelnet, in exchange, has paid the Alumni Association $25,000 per year plus $100 for each completed loan-consolidation application. The total amount Nelnet has paid the association each year is about $39,000, meaning Nelnet has received about 140 completed applications each year from OU graduates.
The association has used the money for programming and for publishing its newsletter.
Leo Jennings, a spokesman for the Ohio Attorney General's office, has said in the past that such partnerships between consolidation companies and Ohio alumni associations might lead alumni to believe that a preferred company offers the best method for repaying loans, which might not always be true.
The Alumni Association does not promote other loan consolidation companies. They chose Nelnet because it could handle the large number of OU alumni and because it had a good reputation, said Sally Linder, a spokeswoman for the university.
At Ohio University
the relationship was very appropriate she said, No individual benefited.
Nelnet will continue loan consolidation, and OU graduates using Nelnet's services should not be affected.
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Christa Gould
