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Attorney general plans to sue University in loan scandal
Noah Cohen
Issue date: 4/20/07 Section: News
New York Attorney General Andrew Cuomo announced April 19 his intent to sue the University for its relationship with the student loan provider Education Finance Partners as part of the first legal action against a school. Drexel responded by saying it would defend its position and questioned Cuomo's tactics.
The Attorney General's office notified The Triangle along with other publications that they intended to file suit against the University for deceptive business practices.
A letter of intent to sue was released to the media April 19, the day it was mailed to the University.
Officials at Drexel questioned this tactic in a statement released Thursday evening.
"We received no communication from the Attorney General's office until today when a letter regarding his intent to was sent to our undergraduate student newspaper".
"The timing and public release of the Attorney General's notice of intent to sue raises troubling questions as to his motivations and to his tactics" read the Drexel statement.
Drexel was named in March for engaging in a revenue sharing agreement with Education Finance Partners in exchange for recommending EFP as the "sole preferred lender" to students.
Cuomo's office has labeled this revenue sharing agreement as a "kickback".
According to the University the money gained from the relationship was used for scholarships.
"A revenue reinvestment that is being used for scholarships is really not a kickback" financial aid director Melissa Englund told The Triangle in an April 6 interview.
Cuomo's office also alleges that the University allowed EFP to use Drexel's logo on EFP marketing materials.
"Drexel has also repeatedly and persistently engaged in misleading and deceptive business practices and false advertising" read the letter sent to Drexel.
Employees of Educational Financial Services, not of the University, staff Drexel's prospective student financial aid call center.
The Attorney General's office notified The Triangle along with other publications that they intended to file suit against the University for deceptive business practices.
A letter of intent to sue was released to the media April 19, the day it was mailed to the University.
Officials at Drexel questioned this tactic in a statement released Thursday evening.
"We received no communication from the Attorney General's office until today when a letter regarding his intent to was sent to our undergraduate student newspaper".
"The timing and public release of the Attorney General's notice of intent to sue raises troubling questions as to his motivations and to his tactics" read the Drexel statement.
Drexel was named in March for engaging in a revenue sharing agreement with Education Finance Partners in exchange for recommending EFP as the "sole preferred lender" to students.
Cuomo's office has labeled this revenue sharing agreement as a "kickback".
According to the University the money gained from the relationship was used for scholarships.
"A revenue reinvestment that is being used for scholarships is really not a kickback" financial aid director Melissa Englund told The Triangle in an April 6 interview.
Cuomo's office also alleges that the University allowed EFP to use Drexel's logo on EFP marketing materials.
"Drexel has also repeatedly and persistently engaged in misleading and deceptive business practices and false advertising" read the letter sent to Drexel.
Employees of Educational Financial Services, not of the University, staff Drexel's prospective student financial aid call center.
Viewing Comments 1 - 4 of 4
Chris
posted 4/20/07 @ 7:14 AM EST
Big business (banks) owns the world. After all, corporations and gov't are merely quid-pro-quo whorehouses sold to the highest bidder. When the gov't needs illegal wire-taps, Verizon and Sprint allow them secret rooms to listen in on calls. (Continued…)
Patrick Stevens
posted 4/20/07 @ 11:37 AM EST
There is something here that is a very political looking that the Attorney General of Commonwealth of New York State, would pursue a law suit against Drexel University in Pennsylvania. (Continued…)
Gloria Silva
posted 4/23/07 @ 11:27 PM EST
Drexel forced me to get a loan. I know there is more students out there with the same problem. we should all post
Jen
posted 5/07/07 @ 11:24 AM EST
I WISH I knew a lawyer because I'd be suing Drexel right now.
I chose to consolidate my loans at the end of 2006. Inundated with mail from loan companies and from Drexel, I mistakenly filled 2 different consolidation applications. (Continued…)
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