TCU has suspended all activity with University Financial Services, a student loan vendor, because of accusations from the New York Attorney General. The TCU Athletics Department is one of 40 university athletic departments under investigation by New York Attorney General Andrew Cuomo for suspicion of making an illegal deal to promote a student loan provider in return for revenue.
According to an Aug. 1 statement by Cuomo, 38 of the 40 universities being investigated are classified as Division I-size by the NCAA and were subpoenaed for documents by Cuomo. The University of Texas at San Antonio, Georgia Institute of Technology and Tulane are among the universities being investigated.
According to the statement, the Attorney General’s office is specifically looking to answer whether athletic departments researched interest rates before recommending the loan providers or referred the loans to students based only on the payments and perks they received from the lending companies.
“To betray this trust by promoting loans in exchange for money is a serious issue, especially when Division I schools already generate tremendous revenue from their student athletes,” Cuomo said in the statement.
The TCU Athletics Department issued a statement on the loan inquiry on Aug. 2. According to the statement, the university uses a national marketing company, International Sports Properties, to contract with the loan provider.
According to the statement, “The revenue that athletics receives is from that overall contractual agreement.”
ISP established the national contract with University Financial Services, that markets its program to students, alumni and fans.
The athletics department also stated that it did not directly receive any profits from UFS. The department directed ISP to suspend all activity from UFS and other student loan lenders.
When asked about the revenue and how the suspension would affect the athletics department and TCU, Mark Cohen, TCU director of athletics media relations, said he would not comment further on the Aug. 2 statement.
