Walter C. Cathie, a vice president at Widener University, spent years working his way up the ranks of various colleges and forging a reputation as a nationally known financial aid administrator. Then he made a business out of it.
Mr. Cathie, pictured in a 2005 brochure from Student Lending.
He created a consulting company, Key West Higher Education Associates, named after his vacation home in Florida. The firm specializes in conferences that bring college deans of finance together with lenders eager to court them.
The program for the next conference, slated for June at the Marriott Inner Harbor at Camden Yards in Baltimore, lists seven lenders as sponsors. One sponsor said it would pay $20,000 to participate. Scheduled presentations include “what needs to be done in Washington to fight back against the continued attacks on student lenders” and the “economics and ethics of aid packaging.”
Investigations into student lending abuses are broadening in Washington and Albany. Mr. Cathie is still at Widener, and his roles as university official and entrepreneur have put him center stage, as a prime example of how university administrators who advise students have become cozy with lenders.
Widener, with campuses in Pennsylvania and Delaware, put Mr. Cathie on leave this week after New York’s attorney general requested documents relating to his consulting firm and told the university that one lender, Student Loan Xpress, had paid Key West $80,000 to participate in four conferences.
Mr. Cathie said in an interview yesterday that he still hoped to pull off the June event. “Though who knows, if nobody comes, I guess it’ll implode,” he said.
Several of the scheduled speakers said in interviews that they were canceling.
“Yes, I’ve made money,” he said, “but I haven’t done anything illegal. So I’d sure like this story to get out, that — you know, Walter Cathie is a giving individual, that he’s been very open, that he’s always taken the profits and given back to students.”
He said he had donated some consulting profits to a scholarship fund in his father’s name at Carnegie Mellon University, where he worked for 21 years. “I’ve been in this business a long time, I’ve always been a student advocate, and I haven’t done anything wrong,” Mr. Cathie said.
Others say his case illustrates how some officials have become so entwined with lenders that they have become oblivious to conflicts of interest.
“The allegations made against Mr. Cathie and his institution point at the structural corruption of the student lending system,” said Barmak Nassirian, a director of the American Association of Collegiate Registrars and Admissions Officers.
The system has become so complex, and involves so much money, Mr. Nassirian said, “the temptation has become too great for many of the players to take a little bite for themselves.”
The program for the conference in June lists corporate sponsors. One is Student Loan Xpress, whose president, according to documents obtained by the United States Senate, provided company stock to officials at several universities and at the Department of Education.
Another is Education Finance Partners Inc., which Attorney General Andrew M. Cuomo of New York has accused of making payments to 60 colleges for loan volume. Neither company returned calls for comment.
The program lists as a speaker Dick Willey, chief executive of the Pennsylvania Higher Education Assistance Authority, a state loan agency facing calls for reform after reports that board members, spouses and employees have spent $768,000 on pedicures, meals and other such expenses since 2000.
Mr. Willey’s spokesman, Keith New, said that Mr. Willey would not speak at the conference, but that the agency intended to sponsor it with a “platinum level” commitment of $20,000.
Mr. Cathie came to Widener in 1997, initially as its dean of financial aid, after years at Allegheny College, Carnegie Mellon and Wabash College in Indiana, building a background in enrollment management and financial aid.
In 1990, well into his tenure at Carnegie Mellon, Mr. Cathie and his boss, William Elliott, an admissions official who is today Carnegie Mellon’s vice president for enrollment, began organizing annual conferences for college administrators to debate policy issues, both men said.
They named their conferences the Fitzwilliam Audit after the Fitzwilliam Inn in New Hampshire, where they were held, Mr. Cathie said.
Mr. Elliott and Mr. Cathie sponsored about 14 of them from 1990 through 2004, both men said. At first the conferences focused mostly on admissions issues, but they evolved to include student finance, and some bankers and other lenders began to attend, Mr. Elliott said.
The cost was about $400 per person, and bankers paid the same for their participation as any college official, Mr. Elliott said.
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