Magazine article University Business

Charges against Student Loan Lenders

Magazine article University Business

Charges against Student Loan Lenders

Article excerpt

NEW YORK STATE'S ATTORNEY GENERAL Andrew Cuomo stole a page from Eliot Spitzer's book when he took on the student loan industry in March. Spitzer, Cuomo's predecessor and now governor of New York state, made a political name for himself by questioning practices in the insurance and financial services industries.

Now Cuomo is taking on corteges, universities, and the banks and tenders who are on their "preferred tender" lists. Cuomo has launched an investigation and says he will be filing a lawsuit to stop what he carts "deceptive practices" in the student loan industry.

"An unholy alliance" is his description of the relationship between IHE and lender, noting that some financial firms give lucrative kickbacks to schools who steer students and their parents to them in order to take out loans. His March 22 statement charges Education Finance Partners with awarding basis points on loans written to students at Duquesne University (Pa. …

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