Attorney General Cuomo Applauds Student Loan Settlements
NEW YORK, NY (August 27, 2007) - Attorney General Cuomo today commended student loan settlements with three schools in Connecticut, Trinity College, Fairfield University and Sacred Heart University, involving contracts they had with the College Board. These contracts included placing the College Board on their list of preferred lenders in exchange for discounts on software products and financial aid programs. While the Connecticut Attorney General conducted the settlements with these three schools, Attorney General Cuomo’s investigation into the lending industry and College Board remains ongoing.
“Today’s settlements are an important extension of the Student Loan investigation and a sign of the teamwork between my office and many other Attorneys General across the country,” said Attorney General Cuomo. “As more and more schools across the country are lining up to adopt our Code of Conduct, it is extremely gratifying to see these colleges pledging to handle their relationships with lenders more responsibly.”
Trinity College, Fairfield University and Sacred Heart University entered into Software and Data License Agreements with the Collage Board. These agreements gave the schools discounts on purchases of financial programs and tools, which had been developed by the College Board. In exchange for these benefits, the schools placed the College Board on their list of preferred lenders. Such contracts raised concerns about the school’s recommendations, since they were given financial benefits to list the College Board as a “preferred lender.”
To date, 26 schools have committed to Cuomo’s Code of Conduct. 10 of these schools have agreed to reimburse students over $3 million for the cost of revenue sharing agreements. Cuomo’s nationwide investigation into the student loan industry has also resulted in agreements with 12 student loan companies, including the eight largest lenders in America - Citibank, Sallie Mae, Nelnet, JP Morgan Chase, Bank of America, Wells Fargo, Wachovia, and College Loan Corporation - as well as Education Finance Partners (EFP), CIT, National City Bank, and Regions Financial Corporation. Citibank, Sallie Mae, Nelnet, CLC, EFP, CIT, Johns Hopkins University, Columbia University, Mercy College, and Career Education Corporation have all agreed to contribute a total of $13.7 million to the National Education Fund established by Attorney General Cuomo. This fund is dedicated to educating and assisting the country’s high school students and their families about the financial aid process.
Cuomo’s Code of Conduct has become New York State law as the Student Lending Accountability, Transparency, and Enforcement (SLATE) Act of 2007. Proposed federal legislation regarding the student loan industry also incorporates Cuomo’s Code of Conduct: the Student Loan Sunshine Act has been passed by the U.S. House of Representatives and the U.S. Senate.