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Regulation changes create
' O This regulation eliminated students
new money for NU students many UNL students using direct UNL
By Nicole Hall
Staffwriter
University of Nebraska-Lincoln
students will now have a chance at
Foundation for Educational Funding
Need-based Scholarships.
The money was previously
sequestered for students who used a
type of loan called the Federal Family
Education Loan Program. UNL
bypasses the FFELP loans and offers
direct student loans.
“The intention (of the scholarship)
was to reward upperclassmen who have
persevered,” said Tammy Stevensen,
scholarship coordinator for FEF.
On May 9, the Omaha World
Herald reported a story about the sell
ing ofNebHelp in order for it to transfer
from a tax-subsidized, non-profit orga
nization to a for-profit organization. It
questioned the exchange of money and
the valuation ofNebHelp because that
amount would therefore be given to
FEF.
NebHelp and FEF had raised their
funds by loaning FFELP money.
Therefore they wished to loan to only
FFELP schools. Their argument, UNL
Vice Chancellor of Student Affairs
James Griesen said, was that since they
had raised their money from FFELP,
they wanted to return it to those schools
that also use those loans.
Griesen’s counter argument was
that UNL was a FFELP school the
majority of the time that they raised
their funds, and if FEF was a charity, it
should not matter where the money
comes from.
Last year, Congress passed a bill,
USC section 150, which allowed non
profit secondary len4ers the option to
transfer to the for-profit market.
NebHelp took advantage of the option.
The Consumers Union, which has
offered the primary critique of the
transaction, is also investigating Ohio
and Massachusetts, and is also consid
ering investigating South Dakota for
the same transaction.
The transaction raised many ques
tion about the sale of the tax-subsidized
NebHelp’s loans and assets an<8
whether they benefited the new for
profit NebHelp or the intended citizens.
Since that story, the Consumer’s
Union and the Nebraska Attorney
General’s office have been investigat
ing the transaction. The Nebraska
Attorney General’s office is expected to
release its official response next week.
It has been discovered that FEF was
in violation in two ways from the
Nebraska Nonprofit Corporation Act
The Attorney General’s office noti
fied FEF that within its loan brochures,
which were available in its three
Education Planning Centers, it
endorsed its own loan program without
mentioning others. FEF manages
Education Planning Centers in Omaha,
Lincoln and Kearney. These offices
provide information for financing col
lege.
The organization also had a regula
tion that stated that recipients of the
scholarship must be using FFELP loans
FEF originally suggested that UNL
should become a FFELP school in
order to receive the scholarships. This
suggestion would have profited the lim
ited number of local banks that loan the
FFELP loans.
Once notified of the violations,
FEF agreed to began changing the
brochures in its Education Planning
Centers and it changed the scholarship
to include all students.
FEF did grant $50,000 to the NU
campuses’ Tom Osborne’s Teammates
mentoring program for alums of the
program that are attendmg one of the
NU campuses.
FEF gave out its first allotment of
the scholarship money to universities in
January. The FEF has no plans to go
back and apply the new changes to the
money that has already been distrib
uted, which the universities will be
reporting on in September. The new
scholarship regulations will take effect
on the next allotment of money.
FEF and NebHelp were the same
company. Then FEF divested itself
from NebHelp. NebHelp became a for
profit organization and FEF has
remained a non-profit organization.
“It’s like an old building with new
paint on it and a new shop inside,”
Assistant Attorney General Jason
Hayes said.
In addition, from the sale of
NebHelp, the organization was
required by law to donate the revenue
from its assets to a charitable organiza
tion. FEF received $113 million from
the sale of NebHelp.
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