From the Lincoln Journal-Star:
Lincoln student loan company Nelnet has reached a settlement with the U.S. Department of Education that will allow it to keep $278 million in disputed profits from a controversial loan subsidy.
As part of the agreement, Nelnet agreed to not take advantage of the subsidy in the future, depriving the company of more than $880 million in potential profits.
John’s been all over the student debt issue, working with Campus Progress to raise the profile on campus. This is an issue very closely related to the rising cost of education: namely, private lenders screwing taxpayers and students out of money.
All of you should be pretty familiar with Nelnet by now, if you have student loans (and most of us do). They are a large employer in Lincoln, but that does not excuse their behavior here, their cheating of taxpayers, or their lobbying of the federal government to raise interest rates on student loans. Now, the government promises to look the other way and let Nelnet get away with stealing money, as long as they promise not to do it anymore. Nelnet has been one of the reasons why it’s more expensive than ever for a student to go to college.
As Kyle points out, Jeff Fortenberry got a significant amount from Nelnet during this campaign – and Nelnet was the single largest contributer to the National Republican Congressional Committee. Fortenberry was a “no” vote on cutting interest rates on student loans, as it would cost one of his biggest campaign contributors money.
Cutting interest rates on student loans is a good start, but I hope that our leadership in Washington moves toward some genuine reform in the student financial aid process. It’s absolutely appalling that students graduate with more debt than ever, while companies like Nelnet are rewarded with $278 million for swindling taxpayers and students.