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Transcript of EDUCAP
the revenue for loans. University Support Services was renamed EduCap S DAL AN C Catherine still backed Educap through all the scrutiny She challenged her critics to take their grievances to congress... Washington Post. The Washington Post, 02 Aug. 2007. Web.
"Higher Ed Watch." BREAKING NEWS: Loan to Learn Restructuring; Major Layoffs. N.p., n.d. Web.
"News." EduCap, a Lender Under Investigation, Says It Will Reduce Student-Loan Operations. N.p., n.d. Web.
"Educap, Private Jets, and 18% Student Loans." YouTube. YouTube, 04 Mar. 2009. Web."
Student Loan Charity Under Fire." CBSNews. CBS Interactive, 26 May 2009. Web.
"News." U.S. Senator Broadens Inquiry Into Spending by Nonprofit Lender EduCap. N.p., n.d. Web. 28 Feb. 2013 RESULTS The decision of the IRS is unknown and has never chosen to comment. Background Provides funding for students who do not qualify for federal financial aid.
Initially directed to schools in Washington D.C.
Later, opened up a company called University Support services. Overcompensation? $1 Million Annually Reynold's annual paid income was one million dollars,
plus the lavish trips and perks she got as CEO Overspending? Users Best Interest? $31 million jet Overspending and Conflict of Interest... * Educap used their earnings to buy a $31 million jet that cost thousands of
dollars an hour to run. * Loan to Learn hosted an all expense paid conference for university officials and their spouses in Pebble Beach; ends up on some schools list of recommended private lenders. People who received "business trips" in the
jet include: Then CIA director Leon Panetta,
former FBI director William Sessions, Former
senator Ted Stevens, and Mayor Daley HOWEVER: Their biggest grant by far was $8 million Their Mission includes "the best interest of students" BUT: the company allows some
students to borrow up to $50,000
a year at up to 18% effective interest
rates Reynolds used Educap as a
way to extend her philanthropic arm. She donated profits to other
Charities OF EDUCAP THE SCANDAL NONPROFIT LOAN PROGRAM PLAN Loan to Learn Servus Financial
Catherine B. Reynolds Foundation
Loan to Learn to The Academy of Achievement... Which happened to be run by Catherine's husband Wayne Reynolds Congress listened! Continue to service existing loans but scaled back on lending operations. Restructure the Loan to Learn program. Their was a lot of talk about her planning to sell the companies loan assets or bringing in investors. As a result of the restructuring in 2007 there were major layoffs and many believed the company would close by the end of the year. Three years after the controversy, Catherine Reynolds considered jumping back into the private student loan market Congress considered proposals that could stop her.The proposal could be found in the House of Representatives financial regulatory overhaul bill. Educap was questioned by the Senate Finance Committee
and IRS to investigate if they had abused their 501c3 status. Reynolds was asked for documents explaining how Educap set loan rates, approved costumers, and spent its money. The bill requires colleges to certify whether a student needs private loans before students acquire them from companies such as Educap.
This gives financial aid administrators the opportunity to advise students about their options before they take on unnecessary private loans with high interest rates. Catherine Reynolds has stated that "any financial benefit to their family was legal and in accordance with normal business procedures." -By Amit R. Paley and Valerie Strauss
Washington Post Staff Writers
Monday, July 16, 2007