ALBANY, N.Y. — New York Attorney General Andrew Cuomo is investigating whether top college athletic departments nationwide — including those at the University of Oregon and Oregon State University — steered athletes and other students to education lenders in exchange for kickbacks.
Cuomo said Wednesday that he served 39 universities with subpoenas and requests for documents about deals between athletic departments and Student Financial Services Inc., which operates as University Financial Services.
Cuomo said he’s looking at how team names, mascots and colors were used to suggest the company was the college’s preferred lender.
Oregon State did not receive a subpoena, sports information director Steve Fenk said.
“It’s not a subpoena, it’s a public records act (request),” Fenk said. “We are complying with it.”
University of Oregon spokeswoman Pauline Austin said the school had received a subpoena and that lawyers were reviewing it.
In a statement issued late Wednesday, UO said the school has no contract with University Financial Services. However, it said ESPN Regional Television, the university’s marketing agent, has an agreement with UFS to sponsor Oregon athletics.
The agreement between ESPN Regional Television and the University Financial Services allows UFS to set up a table at football and basketball games to distribute marketing literature. It also permits advertising on the GoDucks.com Web site, provides specified advertising in game programs, and provides announcements of UFS as a sponsor of Oregon athletics.
“It does not provide any special access to student athletes or other students and does not recommend UFS in any way,” according to the statement from university spokesman Phil Weiler.
Weiler said no university employees are involved in the arrangement and no school employees receive benefits from it.
Cuomo began the investigation as an outgrowth of his national probe of student loan providers and college administrators, which he said uncovered a pattern of favoritism for lenders who provided kickbacks, “revenue sharing’’ plans, and trips and other gifts in exchange for designations as recommended lenders. Sometimes the colleges provided campus employees to staff telephone banks for lenders drumming up business.
Cuomo’s findings led to state and national reforms.
“Today’s action is an important new step as we continue to examine the unethical conflicts that pervade the student loan industry,’’ Cuomo said.
In a written statement issued late Wednesday, University Financial Services said: “The relationships between our company and athletic departments of various colleges and universities are part of our generalized marketing efforts, the same as advertising at any sporting event, and do not involve the financial aid departments of the schools involved. ... UFS supports the student loan code of conduct and plans to fully cooperate with the New York attorney general’s office.”
Among the other schools involved in the investigation are UCLA, the University of Kansas, Rutgers University, Auburn University, Ohio University, Texas Christian University and Georgetown University.
“Students trust their university’s athletic departments because so much of campus life at Division I schools centers on supporting the home team,’’ said Cuomo. “To betray this trust by promoting loans in exchange for money is a serious issue, especially when Division I schools already generate tremendous revenue from their student athletes.’’
Cuomo said that during his first investigation, he found the athletic director of Dowling College on New York’s Long Island entered into a revenue sharing agreement with University Financial Services that paid the college $75 for every new loan application, gave exclusive marketing advantages on campus, and allowed the lender to use the department’s interns to disseminate its brochures.
Dowling ended the relationship with the company as part of its settlement of Cuomo’s investigation.
Cuomo’s investigation has resulted in settlements and reforms with 12 lenders — including Nelnet Inc., Citibank, Sallie Mae, JP Morgan Chase and Bank of America — and several colleges, with $13.7 million in payments made to a national education fund to help high school students and their families more wisely and safely apply for student loans.
Cuomo has said the U.S. Department of Education has had weak oversight of the student loan industry, a view supported Wednesday in a report by the investigative arm of Congress.
The Education Department is supposed to make sure banks that participate in the federal student loan program aren’t giving schools or school officials anything of value in exchange for getting business at a particular school.
But the department has not sought out cases of improper conduct, according to the report by the Government Accountability Office. It found the department primarily responds to complaints, and doesn’t even do a particularly good job of tracking those.
During the past 20 years, the department has brought cases against only two lenders, according to the report. More often, department officials have written letters to lenders asking them to stop acting improperly.
The department recently issued proposed regulations to try to limit abuses by lenders. Those could become effective next year.
On the Net: New York Attorney General, www.oag.state.ny.us