SHANNON KELLY
News Editor
Pepperdine has ended relations with a lender that has been accused of providing kickbacks to numerous colleges and their financial aid offices. “It has become evident that the nominal benefit provided to our students may be outweighed by the perception that the arrangement creates,” Vice President for Advancement and Public Affairs Keith Hinkle said in statement today.
This decision follows allegations from New York Attorney General, Andrew Cuomo, who is investigating about 100 universities, including Pepperdine, for deceptive financial aid practices.
“This is a widespread, industry-wide practice and it’s gotten worse over the years,” Cuomo said at a Manhattan news conference Thursday, according to the Times.
The University’s decision to end its agreement with the “preferred lender” follows this week’s media spotlight on the attorney general’s investigation.
Today The Los Angeles Times reported that Pepperdine received kickbacks from Education Finance Partners for including the San Francisco-based firm on its “preferred lenders list,” without properly disclosing the payments to students.
“Several of Pepperdine’s schools, including its business school, received payments from Education Finance Partners, according to a person familiar with the matter who spoke on condition of anonymity”, the Times reported. “Pepperdine received 0.5% of the loan amounts it had booked with the company, the person said.”
Four of Pepperdine’s five schools “have arrangements with a lender that provided a minimum return to the University that is used to assist other students seeking financial aid,” according to Hinkle. “It has become evident that the nominal benefit provided to our students may be outweighed by the perception that the arrangement creates,” he said in the statement.
Education Finance Partners denied misconduct and said, “We question whether the attorney general’s office is seriously interested in learning all of the facts and whether there has been an actual violation of law,” according to the Times. “We will continue to conduct ourselves with the highest business and ethical standards,” said Tamera Briones, Education Finance Partners chief executive.
Please see the Graphic’s March 22nd article, “Pep pegged in national kickback probe,” for more on this story.