 "Photo: Karl Spurzem")
The attorney general of New York is investigating allegations of all-expense paid trips and illegal gifts to financial aid officials from student lenders.
The University of Nebraska-Lincoln is on New York Attorney General Andrew Cuomo’s list of 60 public and private universities under review for possible violations of the federal prohibition against inducements, or incentives.
Earlier this month, UNL officials received a letter from Cuomo’s office requesting information on its relationships with private student lenders.
The University of Nebraska Board of Regents approved a partnership with Nelnet in 2004 in which the lender would purchase graduate and professional student loans while UNL would be entitled to 6.05 percent of the profits.
Nelnet has also received requests for information from Cuomo’s office earlier this year.
Another UNL connection lies with the NU Foundation, which owned 842,417 shares of Nelnet stock in 2004, according to financial proxy statements filed to the U.S. Securities and Exchange Commission by Nelnet.
The foundation’s stock in Nelnet dropped to 415,000 shares last year.
With the average year-end value of Nelnet stock spiking in 2005 to $40.68 per share compared with $26.93 in 2004 and $27.36 in 2006, the foundation could have made millions from Nelnet stock sales.
From January 2003 to June 2005, the private lender overcharged the government on subsidy payments by $278 million. Nelnet was allowed to keep its $278 million in disputed profits in an agreement reached last month with the federal government but agreed not to pursue future overpayments, according to an Inspector General audit report released last September.
Some NU regents said they didn’t think the foundation’s Nelnet stock was announced in 2004 when the Nelnet partnership was approved.
“I’m not aware if that was disclosed and if it was required,” said Regent Jim McClurg of Lincoln.
At that October 2004 meeting, regents also considered a charitable contribution in a closed-door executive session, which Regent Charles Wilson of Lincoln said was unrelated to the Nelnet vote.
“Any connection, if there was one, had no part in the discussion of the approval of the partnership with Nelnet,” Wilson said. “I did not know that the foundation had any investment in Nelnet.”
Wilson declined to comment on anything discussed in executive session regarding the charitable contribution.
The Nelnet stock was received as a gift from the W.E. Barkley Trust in 1996, said Robb Crouch, the director of public relations for the foundation.
Nelnet went public with its stock in December 2003.
The Barkley Trust donated almost $30 million to the foundation in 1996, which was largely used to fund the development of programs to help those with speech and hearing disorders at the Barkley Center.
The requests for information targets the period beginning in Jan. 1, 2004, up until now. The response is due March 1, although UNL officials planned to hand over the information this month.
