Nevada financial aid passes the test

The financial aid directors from the eight universities and community college systems that make up the Nevada System of Higher Education met quietly in April. A scandal was brewing over financial aid, and the discussion was sensitive.

Federal and state authorities were looking closely at the $85 billion student loan industry, which is dominated by the nation’s major banking companies. Sharon Wurm, director of financial aid at the NSHE’s Office of Academic and Student Affairs, had been snooping. She wanted to know if any student loan officials had ties to lending institutions — ties that could be perceived as too cozy.

She was looking for stock holdings, memberships on lender boards, gifts or any other financial ties that might create a conflict.

After the meeting and an “informal investigation,” NSHE Vice Chancellor Daniel Klaitch told the attorney general that there were no problems.

Wurm said: “I really don’t think we have any big issues in the Nevada System.”

The amount of financial aid provided to Nevada public university and college students has risen by $110 million in just four years. Financial aid is a loose term for a combination of grants, federally backed loans, scholarships, campus jobs and private borrowing.

During the 2001-02 school year, students received $189 million in financial aid. By the 2005-06 school year, students received $299 million in aid.

As much as $134 million of the 2005-06 financial aid package came from loans. Eighty-three percent of the package was used to pay tuition and fees at the University of Nevad, Reno and the University of Nevada, Las Vegas. Despite the growth in available funding, $42 million in tuition costs and fees were not covered by any financial aid, meaning students likely had to go to private lenders to make up for some of the shortfall.

The two universities each provide a list of what, until recently, were called “preferred lenders.” Financial aid officials rate them the best sources of private funds because each has a record of working well with students and with the school officials who seek to understand the loan details. It is this relationship between lenders and schools that state and federal authorities are scrutinizing closely.

The state’s two largest universities offer a stark contrast in the way students pay for college.

UNLV is a direct lender. Most of the school’s students receive loans straight from the federal government through the U.S. Department of Education. UNR uses the Federal Family Education Loan Program, in which money comes directly from commercial banks, credit unions and savings institutions.

UNLV is the only direct lender in the Nevada system. It too provides a list of private lenders, particularly for graduate students whose college costs may not be fully covered by federal loans.

Much of the recent scandal has ensnared financial aid directors at FFELP schools, including the University of Texas, Austin; Johns Hopkins University; and Texas Tech University. Recent reports also suggest officials at the University of Notre Dame may have had too cozy a relationship with some lenders.

According to recent testimony before the Senate Health, Education, Labor and Pensions Committee, financial aid directors at these schools had accepted money from banks that wanted to be included on a lender list and took payments as consultants for lenders doing business on their campus.

UNR offers lists of lenders for three different loan types. Each list contains virtually the same lenders: Wells Fargo, Nelnet, EFSI, Collegiate Solutions, StudentLoan Express, Wachovia, Bank of America and CitiBank. Lately, the school’s largest lender has been Union Bank & Trust.

Sandy Guidry, interim financial aid director at UNR, said a committee of five financial aid professionals send about 16 lenders requests for information each year asking for details on their student lending. After returning the requested information, lenders are invited to answer questions about their loan policies and customer relations.

“We bring all the lenders in and we grill them,” she said. “We’re actually pretty tough on them.”

This legwork has some lawmakers concerned. According to the most recent issue of Student Aid Transcript, a trade journal published by the National Association of Student Financial Aid Administrators, “This practice has led to increased concern among legislators, policymakers, and others as to whether inappropriate and/or illegal linkages are being established between the private loan terms offered by lenders and the PLL (preferred lender lists) treatment those lenders receive.”

At UNLV, students are offered a list of alternative lenders should their federal funds not cover the complete cost of their education. Because alternative loans are between students and lenders and based on the student’s credit, the universities are unable to track how many students take out these private loans.

UNLV publishes a list of lenders on its Web site. Wurm described this aspect of the industry as “very unregulated.”

Wells Fargo has been in the education loan business for 40 years, and today is the fifth largest lender in the country. In the 2004-05 and 2005-06 school years the banking company financed $8 million each year in annual education loans at UNR. The company also finances a number of private loans in Nevada. For reasons of propriety, though, Wells Fargo officials won’t reveal how much in private school loans it typically funds in a given year.

Spokeswomen Mary Berg and Staci Schiller said Wells Fargo once invited 15 to 20 university financial aid professionals from colleges across the country to participate in the company’s student loan advisory board. The bank would pay for the student loan directors’ lodging and travel.

Although Wells Fargo ended the practice in 2005, Berg says the advisory board was an asset for students, schools and the industry.

“We have had advisory councils and believe advisory councils are a valuable asset. These are not compensation positions,” the spokeswoman said.

On May 29, Wells Fargo released a set of “Responsible Education Finance Principles and Marketing Practices.” Among them was a set of criteria whereby the company agrees not to provide any items of value to schools or officials, including the lodging and travel expenses, revenue-sharing and opportunity loans, or loans to people who otherwise wouldn’t qualify — a practice being investigated by New York Attorney General Andrew Cuomo.

On May 30, the Consumer Bankers Association released similar guidelines.

“We actually welcome recent changes in the student loan industry,” Berg said. “We think all lenders should follow the same practices.”

Some changes have been made in Nevada.

“The financial aid directors (systemwide) met and agreed to drop ‘preferred’ from the lenders lists,” Wurm said. “My informal investigation into our institutions didn’t find anything.”

Wurm said that during her research she found neither revenue-sharing agreements, nor any officials with financial ties, such as investments, to any of the lenders.

“As a system, we don’t have established relationships” with lenders, Wurm said. “It is improper to promote one lender over another.”

Guidry, who has spent years in financial aid, says she was disheartened by the unfolding scandal.

“It’s disheartening to those of us who run an honest operation,” she said.

This story first appeared in the Business Press. Matt Ward writes for the Review-Journal’s sister publication and can be reached at or 387-5298.

Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like