Another foul for student loans
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Scott Jagow: The student loan industry has been in turmoil the past few months. Loan companies are accused of bribing financial aid officers at universities to send students their way. Many states and Congress have gotten involved in this investigation. Now, there’s word the problems might be even bigger than we first thought. Here’s Jeremy Hobson:
Jeremy Hobson: New York State Attorney General Andrew Cuomo has subpoenaed a lending company he says paid off athletic departments at 40 universities in return for access to students. He’s subpoenaed the universities as well, including big names like Georgetown and UCLA.
Benjamin Lawsky is special assistant to Attorney General Cuomo. Among the accusations: athletic departments allowed the company, University Financial Services, to use school events and publications to advertise its loans.
Benjamin Lawsky: The athletic department, for example, is even lending its interns to help this lender do some of its business. We’ve seen all of these things.
Lawsky says it’s a problem because student loans involve huge amounts of money and can affect students long after graduation.
In a statement, UFS said the company is ethical in its marketing. Meanwhile, a new government report blames the Education Department for lax regulation of the industry.
I’m Jeremy Hobson for Marketplace.
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