Nelnet will pay original settlement, too

Nelnet will pay original settlement, too

	Published : Sat, 11 Aug 2007 00:31 By : Agencies Print this Story

OMAHA, Neb. (AP) - Student loan company Nelnet Inc. will pay the original $1 million settlement it reached with Attorney General Jon Bruning in addition to a larger sum announced last week, Bruning said Friday.

Bruning had absolved Nelnet of making the payment after the Lincoln-based company agreed to pay $2 million and quit offering some services to universities as part of a settlement with the New York state attorney general's office.

Bruning, a Republican who is running for U.S. Senate, said Friday's action eliminates the ability of his political foes to create the perception of a conflict of interest. Bruning has received $16,000 in contributions from executives of Nelnet and affiliated companies.

'If there has been a misunderstanding by anyone about the nature of the state's agreement with Nelnet, I want to fix that,' Bruning said Friday.

He said he approached Nelnet and they agreed to pay the $1 million, which will go toward student loan assistance programs in Nebraska.

Nelnet President Jeff Noordhoek said Friday that the money is going to a good cause, and that Nelnet has led the student loan industry in an effort to improve transparency.

New York Attorney General Andrew Cuomo is investigating conflicts of interest in the industry and has reached settlements with 11 other lenders, including Citibank, Sallie Mae, JP Morgan Chase and Bank of America.

Fines paid by the companies will be used to educate students about financial aid.

Nelnet announced plans last month to end agreements with 110 alumni groups by mid-August and stop paying the groups for using member lists. It also will no longer answer financial aid questions on behalf of universities.

In April, Nelnet acknowledged what it called have ry small' mistakes in some dealings with colleges. The company paid $4,800 to Western Illinois University for referring students to the company for private loans and gave two financial aid officers at an unidentified school in Albany, N.Y., plane tickets to travel to New York City for a 'theater event,' the Nebraska attorney general's office said.

According to the agreement Nelnet signed, the company also gave school employees tickets to sporting and entertainment events and paid for them to travel to marketing events. The New York City theater trip was only one example of this.

Nelnet also reimbursed university employees for taking trips to the company's service centers in Denver, Indianapolis, Jacksonville, Fla., and in Lincoln.

Nelnet says it serves students in 50 states, has about 3,500 employees and $26.2 billion in net student loan assets.