Dozens of colleges and universities across the country have accepted a variety of financial incentives from student loan companies to steer student business their way. The deals include cash payments based on loan volume, donations of computers, expense-paid trips to resorts for financial aid officers and even running call centers on behalf of colleges to field students’ questions about financial aid.
“We have found that these school-lender relationships are often highly tainted with conflicts of interest,” Attorney General Andrew M. Cuomo of New York said. “These school-lender relationships are often for the benefit of the schools at the expense of the student, with financial incentives to the schools that are often undisclosed.”
Mr. Cuomo said he was still investigating at least 100 schools. He is also notifying about 400 nationwide including all New York institutions to end any such practices, which can give financial aid officers an incentive to steer student borrowers to particular lenders.
Citibank pays Syracuse University a small percentage of the volume of private loans — those that are not guaranteed by the federal government — taken out by its students, according to state officials. Kevin Morrow, a spokesman for Syracuse, said in a statement, that the university was not prepared to respond in detail at this time. He added, “Students are not required to use any of the recommended lenders for their student loans.”
http://www.nytimes.com/2007/03/16/education/16loans.html?ex=1331697600&en=8ec471bc8ace4a0d&ei=5088&partner=rssnyt&emc=rss
“We have found that these school-lender relationships are often highly tainted with conflicts of interest,” Attorney General Andrew M. Cuomo of New York said. “These school-lender relationships are often for the benefit of the schools at the expense of the student, with financial incentives to the schools that are often undisclosed.”
Mr. Cuomo said he was still investigating at least 100 schools. He is also notifying about 400 nationwide including all New York institutions to end any such practices, which can give financial aid officers an incentive to steer student borrowers to particular lenders.
Citibank pays Syracuse University a small percentage of the volume of private loans — those that are not guaranteed by the federal government — taken out by its students, according to state officials. Kevin Morrow, a spokesman for Syracuse, said in a statement, that the university was not prepared to respond in detail at this time. He added, “Students are not required to use any of the recommended lenders for their student loans.”
http://www.nytimes.com/2007/03/16/education/16loans.html?ex=1331697600&en=8ec471bc8ace4a0d&ei=5088&partner=rssnyt&emc=rss
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