N.H. colleges avoid student loan kickback scandal: ties to NHHEAF keep most lenders out of the picture.

The student loan kickback scandal that has touched financial aid offices at some of the nation's largest institutions of higher learning likely won't, affect New Hampshire, primarily because the state is home to a nonprofit organization that handles most financial aid loans.

New York Attorney General Andrew Cuomo recently settled with eight universities charged with steering loans toward Citibank in exchange for cash and other perks and is investigating 100 more institutions and a half dozen loan companies nationwide.

The deals have reaped as much as $1 million apiece for the colleges, and six--New York University, St. John's University, Syracuse University, Fordharn University, the University of Pennsylvania and Long Island University --have agreed to refund some $3.27 million to students. The colleges also signed a code of conduct, which forbids such conduct in the future.

While Cuomo's office wouldn't comment on whether any Granite State institutions were under investigation, the two universities with the largest loan volume--Dartmouth College and University of New Hampshire--both say that they are not targets of any investigation, and that they have not been engaged in any such practices.

Instead of steering most of the students directly to loan companies, the financial aid offices at UNH and Dartmouth direct most to the New Hampshire Higher Education Assistance Foundation (NHHEAF), a non-profit group established in 1965 to oversee such loans. Some 70 percent of the UNH students seeking aid go to NHHEAF, which is also the "default" lender at Dartmouth.

Last year alone, according to the group's Web site, NHHEAF guaranteed some 43,445 loans totaling $184 million. While some other states, like Vermont, have similar nonprofit loan groups, colleges in larger states tend to deal with private loan companies directly.

No lender has approached UNH with any scheme involving a kickback of the student loan business steered its way. That's partly because with most loans going to NHHEAF, UNH doesn't have the volume to make such a deal worthwhile to the lender, said Suzie Allen, director of financial aid at UNH. But it is also because "it's clear we are interested in competitive rates and good service, and that's all we care about. We are not interested in anything that's borderline unethical or illegal."

Indeed, Allen said that many financial aid officers are glad that authorities are cracking down "because if some colleges are behaving badly, it undermines the faith in all financial aid offices."

Dartmouth provides a list of lenders for families seeking federal lenders, but if no choice is made, the office defaults to NHHEAF, said Dartmouth college spokesman Genevieve Haas.

"We do not get financial consideration from them or for any lender," Haas said. "There are no perks or anything like that."

NHHEAF itself processes loan applications, gets the money from New Hampshire Higher Education Loan Corp., and the loan is serviced by the Granite State Management & Resources, all of which are located in the same office in Concord. This one-stop shopping is one of the reasons that financial aid offices encourage students in their direction.

While NHHEAF might work with some banks, there are no "financial arrangements" with them, nor with any college or university, said Tara Payne, the NHHEAF Network Organizations' vice president of marketing and communications.

"There is a different dynamic here than in many other states, and that's why we don't have the same kind of problems," said Payne said.