Magazine article University Business

Shakeup in Student Loans

Magazine article University Business

Shakeup in Student Loans

Article excerpt

THE $85 BILLION STUDENT LOAN INDUSTRY is going through turbulent times. First came the Lawsuits filed in March by New York State's Attorney General Andrew Cuomo, charging that the relationship between colleges and lenders is too cozy. At issue is the practice of creating preferred Lender Lists, which steer students and parents via an IHE to apply for Loans at specific banks.

Then the news that Sallie Mae was not only paying a $2 million settlement in the ongoing case, but would likely be acquired for $25 million by a group of investors that includes the Bank of America and JP Morgan Chase. The company, more formally known as SLM Corporation, also agreed to halt the practice of staffing student Loan call centers, while setting up other education services on financing for families.

Lastly, the federal government acknowledged that student loan lenders were trolling the national student loan database, looking to target parents and students who were already borrowing. …

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