Sen. Dick Durbin, D-Ill. has called on the inspector general of the Department of Education, John P. Higgins, to investigate lenders trying to encourage schools to direct students to borrow from their institutions by providing inducements.

In an interview with The Daily Illini, Durbin said the incentives provided to universities by lenders have included all-expense-paid trips, iPods and other gifts.

Durbin said the issue came to his attention through a series of news stories, including a story published in the New York Times on Oct. 24.

Durbin said he has written Higgins a letter concerning the issue and that he has also met with him.

“I encouraged (the Department of Education) to take up this investigation,” Durbin said. “If the Department won’t look into this problem, the new congress will.”

He said college students across the nation should be concerned about the offering of inducements by lenders and should express their concern to their member of Congress.

“Many students today think they are powerless when it comes to the debts they face because of loans,” Durbin said. “It is time for students to become a strong political voice and potentially save themselves and their families some money.”

Durbin said there has not been any specific wrongdoing found by any college or university in Illinois, but that an investigation would bring any questionable activity to light.

Eric Solomon, spokesman for Nelnet, an education finance company that offers student loans, said, “Inducements that are paid in exchange for loan volume are illegal under the Higher Education Act. Nelnet follows all applicable laws and regulations governing federal loans.”

University students, however, do not need to worry that their loans were recommended on the basis on inducements.

Dan Mann, director of the University’s financial aid office, said that his office only provides loans through the William D. Ford Federal Direct Loan Program, not through the Federal Family Education Loan (FFEL) program, which is the subject of Durbin’s concern.

The Direct Loan Program provides funds to students directly from the government, without the involvement of a private lender. In the Family Education Loan Program, students obtain a loan from a private lender, Mann said.

“We felt direct loans provided the best services,” he said. “The direct loans got money to our students the quickest.”

Mann said that the Family Education Loan Program creates a lot of competition among lenders, which would explain the motivation behind the inducements.

Other universities, like the University of St. Thomas in St. Paul, Minn., offer a list of recommended private lenders to students to take private loans from.

Paula Benson, assistant director of St. Thomas’ financial aid office, said that the lenders on the list are carefully evaluated and that no incentives have been offered or accepted to her knowledge.

“We have looked at their borrower services and the support they provide to our state’s financial aid services before placing them on our list,” she said. “But if lenders were to offer incentives, it doesn’t give the borrower the full perspective.”