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ISSUE 120 VOL 17 PUBLISHED 4/13/2007

Anderson addresses loan fraud inquiries

By Kirstin Fawcett
Copy Editor

Friday, April 13, 2007

In a letter mailed recently to the parents of St. Olaf's student body, President David R. Anderson '74 addressed Minnesota Attorney General Lori Swanson's concerns over a recent student loan scandal that has swept through colleges and universities across the country.

Spurred by New York Attorney General Andrew Cuomo, Swanson, along with other state attorneys general, has recently begun an in-depth investigation of the relationships shared by Minnesota colleges and the student loan companies they endorse. Concerned that Minnesota's colleges are receiving monetary incentives from loan companies in exchange for selling their services to students, Swanson has requested that all state colleges and universities, including St. Olaf College, disclose the financial and personal benefits they receive from their lists of preferred student loaners.

While St. Olaf is not the sole object of Swanson's scrutiny, Anderson has nevertheless taken action to mitigate the potential ire of students and their families by sending out a letter explaining St. Olaf College's policy regarding student loans. In the letter, Anderson explains that the college does indeed have a list of preferred lenders, which have been selected for their efficiency, terms and student benefits. However, Anderson stresses, St. Olaf does not receive any revenue from the loan companies the College recommends.

Anderson's speedy response to questions regarding potential benefits from loan companies is pragmatic, considering the corruption that has recently been unearthed by Cuomo. The reputations of East Coast schools such as the University of Pennsylvania, Syracuse University and Fordham University have all been tarnished due to Cuomo's March investigation of the shared benefits between loan companies and East Coast schools.

UPenn, Syracuse and Fordham have neither confirmed nor denied any accusations of fraud. However, each of the above-mentioned schools have agreed to distribute the amounts they had been paid by loan companies to their student bodies, a conciliatory effort that university officials hope will make amends with potentially outraged undergraduates.

Until Anderson's letter was posted on, many students were unaware of the loan scandal.

In light of St. Olaf's recent tuition rise, the small alumni endowment and large-scale building projects such as the new science complex, some students admit that they could understand if St. Olaf had, in fact, guided students towards choosing certain companies for financial gain.

Ryan Benson '09 said that he would feel used if St. Olaf had cared more about making money than moving him in the right financial direction. However, Benson doubts that St. Olaf has, in fact, engaged in any questionable bargains with student loaners.

"If St. Olaf was profiting from steering students towards certain loan companies, our tuition rate wouldn't have jumped so much over the last year, Benson said. "Obviously St. Olaf could use the money, but it seems like the school does it the honest, although admittedly harder way  rough frenetically soliciting alumni and increasing the amount each student currently pays.

In the midst of the current media blight and Swanson's suspicion, St. Olaf has vehemently stressed the College's scrupulous business practices, stating that their only intent of recommending loan companies is to serve student interests.

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