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No, it is true. The former AD, Bob Mulcahy, says that they were talking to the Big 10 before he left. He left in 2008, so Rutgers was talking to the Big 10 before 2008.
"We always knew as the conference alignment started to shift that if we were not in a position with a program that was competitive and with facilities that were in good shape, no one would take us," Mulcahy said. "That was what everything was about as part of the whole program. That's what we worked toward. Before I left, we were having very quiet conversations with members of the Big Ten and with the commissioner. My feeling was always that if there was a conference that we were going to have to move to, the Big Ten was the right one."
http://www.nj.com/rutgersfootball/i..._sense_of_pride_as_rutgers_joins_big_ten.html
And talk of the old Big East's demise or at least split between football and basketball schools has been around since the late 90's at least, so it would make sense for Rutgers (wait, Rutgers' making sense, wtf?) to seek shelter. Rutgers' faculty has also always seen itself as an elite university (whether that be earned or unearned) as one of the country's oldest colleges (founded as Queens college in 1766 and 1 of only 2 original Colonial Colleges not to be part of the Ivy League)and they wanted access to the B1G's CIC as another feather in their cap (and something that rival Princeton could not get) after finally getting AAU status in 1989. Athletically and student-wise, Rutgers and Penn St have been rivals for decades, too, as many Jersey high school graduates go to Happy Valley and New Brunswick. Thus, once Penn St, joined the B1G, there was interest to follow them to the B1G, especially as Rutgers views itself more as a football school (successful or not on the field) than a basketball school, which is what the Big E was.