Nonprofit Student-Loan Company Comes Under Review
July 16, 2007 | Read Time: 1 minute
Loan industry watchdogs are questioning whether EduCap, a nonprofit student-loan company in McLean, Va., run by the Washington philanthropist, Catherine B. Reynolds, operates in the best interest of students and should retain its nonprofit status, The Washington Post reports.
The Internal Revenue Service has now begun to examine the practices of EduCap, which appears to have benefited Ms. Reynolds and her family, the newspaper says.
The company bought a Gulfstream jet worth about $30-million that Ms. Reynolds has used to fly friends and relatives around the world, according to the article. It has given more than $9-million to a separate nonprofit group run by Ms. Reynolds’s husband — which has donated millions of dollars to Ms. Reynolds’s favorite charities, including $400,000 to her daughter’s private school — and EduCap has paid Ms. Reynolds $1-million in annual compensation.
In an interview, Ms. Reynolds and her husband, Wayne R. Reynolds, said the company has helped more than 350,000 students pay for college, and that any financial benefit to their family was legal and followed normal business procedures.
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