Try searching for "edu text links" on Google and you’ll see ads from companies that promise to place links to your website on .edu web domains that are generally owned by US universities. The same is true for .gov domains as that are the official websites of US government.
A popular belief among the SEO community is that links from .edu or US gov domains carry lot of weight in the eyes of search engines and hence, if any of these ‘trusted’ sites link to your own site, your search rankings get a boost.
Well, that may just be another myth as Google made their stand extremely clear on this during the Webmaster chat session.
Matt Cutts said that websites "don’t get any PageRank boost from having an .edu link or .gov link automatically. If you get an .edu link and no one is linking to that .edu page, you’re not going to get any PageRank at all because that .edu page doesn’t have any PageRank."
So it’s the site that counts and has less to do with the top level domain of the site (e.g., edu). That means your site may derive more Google juice from an old blog hosted on blogspot.com than from a .edu University website that launched a week ago.
Text Links for Sale on Stanford University Site
A Stanford University site daily.stanford.edu initially had a Google PageRank 9 but it was penalized by Google for selling text links. The site continues that practice and therefore the Google PageRank of that site has dipped to 4.
Now if you buy a link on that page, you will definitely get a backlink from the stanford.edu domain but it may not be as effective as you would like it be since the page itself has little Google juice to give away.
Also watch Matt Cutts as he breaks some more SEO myths in this four minute video.