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The Chronicle of Higher Education Quotes Michael Dannenberg

Nebraska Attorney General Defends Nelnet and Assails Cuomo Investigation
August 9, 2007

Nebraska’s attorney general, Jon Bruning, attacked his counterpart in New York on Tuesday over his investigation of Nelnet, a student-loan company based in Lincoln, Neb.

In an interview with the Omaha World-Herald, Mr. Bruning called the New York attorney general Andrew M. Cuomo’s investigation of Nelnet and other student-loan companies “ridiculous” and “political.” Mr. Cuomo expanded his investigation last week to include alleged improper ties between lenders and 40 athletics departments.

Mr. Bruning has himself come under fire in connection with Nelnet. Higher Ed Watch, a blog run by the New America Foundation, has reported that Mr. Bruning’s outspoken defense of the company comes on the heels of a $9,200 donation by Nelnet’s chief executive officer, Mike Dunlap, to Mr. Bruning’s campaign for the U.S. Senate. (Mr. Bruning received an additional $6,900 from other executives at Nelnet and from the Union Bank & Trust Company, which Mr. Dunlap’s family owns.)

Last month, on the same day Nelnet agreed to pay $2-million and sign a code of conduct to settle the New York investigation, Mr. Bruning relieved the company of its obligation to pay $1-million to Nebraska as part of a separate settlement with the state.

In his interview with the World-Herald, Mr. Bruning called himself “a friend of Nelnet” and said he would “never apologize” for his relationship with it. “Nelnet is an ethical, decent, honest company,” he told the newspaper. “Unless you want to publicly fund campaigns, you are going to have individuals contributing to candidates.”

Michael Dannenberg, director of education policy at the New America Foundation, said in an interview on Wednesday that he was surprised anyone would say Nelnet had done nothing wrong because Margaret Spellings, the education secretary, has agreed that Nelnet’s manipulation of the subsidy floor on 9.5-percent loans was illegal.

“To say this is a company with clean hands is belied by the facts,” he said.

For more on this story, please visit The Chronicle of Higher Education web site.



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