Lender Seeks Proof That U.S. Approved Student Loan Loophole

Nelnet has subpoenaed records from the U.S. Education Department that it believes will show that the Bush administration cleared the lender's use of a loophole in federal law that allowed it to reap billions of dollars in profits to which the department later determined it was not entitled, according to the New America Foundation's Higher Ed Watch blog. Nelnet, which is based in Nebraska, was sued in federal court last fall by Jon Oberg, a former Education Department official who brought suit under the federal False Claims Act, claiming that Nelnet had defrauded the government by recycling loans for which they were guaranteed an interest rate return of 9.5 percent. As part of its defense, Higher Ed Watch reported, Nelnet subpoenaed Education Department records to try to show its officials gave it the green light to its practices.