Nebraska Attorney General, Under Criticism, Rules Lender Must Pay

Angela Januzzi

August 14, 2007

Nebraska loan company Nelnet has been reordered to pay a large sum of money that, two weeks ago, it had been relieved of owing. A student lender based in Lincoln, Nelnet was initially ordered to pay $1 million to create a fund for instructing college students about savvy financing.

However, two weeks ago the state’s Attorney General Jon Bruning ruled the company did not have to pay because the New York agreement included a $2 million payment in that settlement, and for the same purpose. Immediate outrage over the decision to revoke the payment, however, swayed Bruning to reinstate it, especially once critics pointed out Nelnet’s history of contributing to Bruning’s campaign funding.

As the student loan scandals continue to intensify, which began with scrutiny by New York State Attorney Andrew Cuomo, no school or local government should assume its interaction with student lenders is completely out of range for criticism.

Source: Glater, Jonathan D. “Nebraska: Student Lender Ordered to Pay.” www.nytimes.com. Posted: August 14, 2007.