Admittedly, that statement is a bit misleading. After all, Bruning was removing a fine that his office placed on the company; Bruning somehow styled himself both prosecutor and defender. But more importantly, Nelnet doesnât exactly have a sterling reputation. Only a few months before the original settlement, Nelnet settled another deal with Secretary of Education Margaret Spellings.
For two years, Nelnet had falsely classified a large collection of loans, resulting in a huge government subsidy. (The government will guarantee student lenders a return of 9.5% on certain types of loans. Nelnet incorrectly identified some loans, allowing them to earn twice market value on the investments.) Spellings informed the company that they would not be able to collect future subsidies on the mislabeled loans, but she did allow the company to keep $300 million in taxpayer money that it had already received.
Maybe Bruning was just sticking up for Nebraska (Nelnet is based out of Lincoln). Then again, Bruning might have been getting on better terms with a firm known for its generous political contributions.
Bruning has announced that he will run for the possibly vacant Senate seat of Chuck Hagel (R). HigherEdWatch.org, whose extensive coverage helped keep the story alive, has noted that the original settlement came only weeks after Bruningâs campaign got a $16,000 boost from Nelnet execs. In fact, the settlement was announced without Bruningâs office ever launching an investigation (presumably, Nelnet approached Bruning in the hopes of avoiding Cuomoâs investigation).
For now, the fine has been reinstated, and Bruning has hopefully learned a lesson both about conflicts of interest and discreet politics. He recently declared in an interview that the resurrected fine âeliminates the opportunity for political gamesmanship by those who may want to create the perception of a conflict of interest.â Weâll see if his opponents agree with him.