It was a BAD week for forgivable loans, after Texas’ attorney general issued a critical report on the University of Texas’ practice of wooing high profile law professors with such loans.
The University of Texas Law School Foundation gave payments to about 20 faculty members from 2000 to 2010, under the leadership of Dean Larry Sager, who resigned in 2011 when the payments came to light.
The report said the law school failed to follow University rules. It held that that while the loans and deferred compensation offered to recruit and retain faculty members were not improper, routing the money through the foundation and not reporting the expenditures to the larger university was in violation of rules.
The law school gave out its last forgivable loan in 2010. Larry Sager, who remains on the law school faculty. Received a $500,000 forgivable loan.
The foundation, however, has distributed “$9 million in other types of disbursements each of the past five years to faculty and student groups that support the law school,” the Texas Lawyer reported. “The payments include funds to cover faculty member’s expenses, student club costs, and, in 2014, $1.08 million for what was formally referred to as the “Dean’s Budget,” but is now entitled “Law School Support.”
