Spring Break
Drexel gives in to Cuomo's demands
By: Noah Cohen
Issue date: 5/18/07 Section: News
Originally published: 5/18/07 at 3:43 AM EST
Last update: 5/18/07 at 3:46 AM EST
Originally published: 5/18/07 at 3:43 AM EST
Last update: 5/18/07 at 3:46 AM EST
Facing the possibility of a long legal battle, the University has taken an about-face and announced May 14 that it will return all money gained from its relationship with student loan provider, Education Finance Partners.
"Drexel University has agreed to adopt the New York Attorney General's Code of Conduct related to student loans, thereby avoiding the expense and distraction of protracted litigation," said Phillip Terranova, vice president of University Relations in a statement.
Although the University released a statement on April 19 saying "Drexel will vigorously defend its position" officials speculated that a court battle with the Attorney General could cost up to $2 million dollars and last over a year.
Under the Attorney General's Code of Conduct the University would no longer receive any 'reinvestment' funds from any loan providers nor would the University allow outside companies to use Drexel's logo in an attempt to sell financial services.
Attorney General Andrew Cuomo has called the reinvestment of funds from EFP a "kickback".
The University has maintained that the EFP funds were placed in a restricted account and used only for an emergency change in circumstances that could occur in student's lives. Joan McDonald, vice president for Enrollment Management, which oversees financial aid, explained that President Constantine Papadakis has pledged to allocate funds from the general University budget to support students needing emergency aid.
"I will have upward of a quarter of million dollars less to offer to Drexel students," said McDonald.
"The president has tried to mitigate that [the loss of revenue] by offering another $150,000 in operating [budget]," added McDonald.
In testimony before the House Committee on Education and Labor New York Attorney General Andrew Cuomo said "My office will continue to pursue lenders, schools and other players in the student loan industry that fail to put student interests first."
"Drexel University has agreed to adopt the New York Attorney General's Code of Conduct related to student loans, thereby avoiding the expense and distraction of protracted litigation," said Phillip Terranova, vice president of University Relations in a statement.
Although the University released a statement on April 19 saying "Drexel will vigorously defend its position" officials speculated that a court battle with the Attorney General could cost up to $2 million dollars and last over a year.
Under the Attorney General's Code of Conduct the University would no longer receive any 'reinvestment' funds from any loan providers nor would the University allow outside companies to use Drexel's logo in an attempt to sell financial services.
Attorney General Andrew Cuomo has called the reinvestment of funds from EFP a "kickback".
The University has maintained that the EFP funds were placed in a restricted account and used only for an emergency change in circumstances that could occur in student's lives. Joan McDonald, vice president for Enrollment Management, which oversees financial aid, explained that President Constantine Papadakis has pledged to allocate funds from the general University budget to support students needing emergency aid.
"I will have upward of a quarter of million dollars less to offer to Drexel students," said McDonald.
"The president has tried to mitigate that [the loss of revenue] by offering another $150,000 in operating [budget]," added McDonald.
In testimony before the House Committee on Education and Labor New York Attorney General Andrew Cuomo said "My office will continue to pursue lenders, schools and other players in the student loan industry that fail to put student interests first."
