Athletic Department Student Loan Scandal
The University of Texas-Pan American athletic department became part of a widening nationwide investigation into whether schools illegally steered students toward loan companies in 2007.
UTPA is one of 39 schools, mostly Division I, where New York Attorney General Andrew Cuomo said he is investigating the athletic departments. Others include University of Texas at San Antonio, University of Texas at El Paso, University of Houston and Texas Christian University.
New York Attorney General Andrew Cuomo was reviewing at least 39 universities, including UTPA. He wants to determine whether the athletic departments agreed to steer athletes to a company in exchange for kickbacks.
Cuomo also subpoenaed the company in question, Student Financial Services Inc., which does business as University Financial Services.
UTPA is one of five Texas schools, three of which are in the UT System, named by Cuomo’s office as part of the investigation. All but one of the 39 schools have Division I athletic programs.
Students trust their university’s athletic departments because so much of campus life at Division I schools centers around supporting the home team, Cuomo said in a statement. 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.
It's all part of a growing scandal, in which lenders gave colleges and top officials money and perks; sometimes based on how many students signed up for their loans.
"Big banks, big lenders made big money at the expense of students who were trying to afford a college education," says New York Attorney General Andrew Cuomo.
This scandal was just one of many instances that let the federal government to no longer allow banks to offer student loans. All loans, including the Stafford Loan, are now through the Direct Loan Program and administered by the Department of Education.
Even Athletic Departments can act badly…
