LINCOLN — The offers clogged Keith Hester's mailbox, promises of the cheapest way to consolidate his student loans mixed in with the usual magazine subscriptions and electric bills.

Hester looked at many of them, searching for the best company with which to pay off the $42,000 he borrowed before graduating from the University of Nebraska-Lincoln in 2006.

He came to an unexpected conclusion: It didn't really matter which lender he chose.

"None really beat the federal government," he said.

Student loans have been in the headlines for more than a year, with a New York attorney general's investigation and revelations of private banks paying off college loan officers, alumni associations and athletic departments to get loan business....

Consumers shouldn't ignore the business practices of companies like Nelnet, said Mike Dannenberg, director of the education policy program at New America Foundation, a pro-direct lending group.Nelnet improperly collected $300 million in subsidies when it found a loophole in federal law that allowed the repackaging of loans at a higher interest rate, according to an audit by the U.S. Department of Education's inspector general.
Nelnet also paid a $2 million settlement in the investigation by New York Attorney General Andrew Cuomo. It found that Nelnet made questionable deals with 120 alumni associations in which the alumni groups allowed their logos to be used on Nelnet advertising in exchange for payment.

"Nelnet has not been a particularly good actor for taxpayers in the federal student loan program," Dannenberg said...

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