Personal Finance

CEO of student loan marketplace LendEDU admits the name of the founder of a partner site is fake

Key Points
  • The name of the founder of The Student Loan Report, quoted by many major publications, is phony. 
  • The revelation was confirmed by the CEO of its affiliate LendEDU.  

A spokesman cited in publications, including a CNBC story in March about students using their financial aid money to invest in cryptocurrencies, is a fake, the CEO of a partner website has admitted.

Nate Matherson, CEO of student loan refinancing company, LendEDU, said he started The Student Loan Report — — in 2016.

Its stated mission is "to provide unbiased coverage on the latest student loan news and information."

The "author and founder" of the news site, Drew Cloud, has been quoted in stories by publications including, The Washington Post, Fortune and The Boston Globe.

The news was first reported by The Chronicle of Higher Education.

In a telephone interview Wednesday with CNBC, Matherson confirmed that Cloud was a not a real person.

"When we made the decision to use a pseudonym two years ago, it was a mistake," Matherson said. 

The story in which Drew Cloud is quoted originated from an email pitch CNBC received about a survey that found 20 percent of college students use financial aid money to invest in cryptocurrencies. The email was signed, "Best, Drew."

When CNBC reached out to Drew Cloud for an interview, he responded via email: "Unfortunately, I am traveling today so will not be available for an interview. I could answer some questions over email when I get the chance." 

A CNBC reporter sent him questions over email and received this response, again, signed off as Drew Cloud. 

The revelation may bring new scrutiny to LendEDU, which started in 2014 and describes itself as a marketplace for private student loans, student loan refinancing, credit cards and other financial products. LendEDU's reports have also been featured in many publications, including CNBC, The Wall Street Journal and Bloomberg.

LendEDU ran advertisements on Student Loan Report's website but never disclosed that the two companies were affiliated.

"There certainly was an advertisement for LendEDU on the Student Loan Report, but it wasn't a huge part of our business,"  Matherson told CNBC. 

According to online research company SEMrush, has had 7,800 organic visitors so far in April.

"The site is not heavily monetized, the plan was not to heavily market any products for LendEDU," Matherson said. "Our long-term vision for the Student Loan Report was to build an informative news site."

Mark Kantrowitz, a well-known student loan expert, said he suspected there might be a connection between LendEDU and Student Loan Report because both claimed a statistical degree of precision from their surveys he said was inconsistent with their sample sizes.

"It stood out as something both sites do, but no one else does," Kantrowitz said. "The use of two decimal points of precision also suggested that some of their surveys were complete fabrications." 

He added: "They've been good at pushing their surveys as news, and apparently not many people asked: 'Who are these guys?'"

So-called independent experts who are used to advance a company's agenda fall into the same worrisome and growing category of "bogus reviews" and "fake news," said Eric Goldman, co-director of the High-Tech Law Institute at Santa Clara University in California.

"If the fake information becomes too big of a percentage, the whole information ecosystem collapses," Goldman said. "No one will know who to trust anymore." 

References to Drew Cloud have been scrubbed from the Student Loan Report site.

Here are links to some other stories that were based on information provided by The Student Loan Report and LendEDU:

College students are investing in bitcoin with financial aid money
Watch out for these scams when figuring out how to pay for college
Colleges can make a fortune from saying 'no' to applicants—here's how much they pull in
This high school senior says he is spending $1,700 on college applications
Student loan interest rates edge higher and higher