2008 Woodie Awards
Kickback scandal absent at SCSU
Benjamin Sobieck
Issue date: 4/30/07 Section: News
When college students across the country invest their money and trust into their educations, they assume the money is getting to the right people for the right ends.
In most cases, this is true. But an investigation earlier this month by New York Attorney General Andrew Cuomo revealed a disturbing conspiracy of kickbacks in some of the nation's college financial aid offices.
When students apply for financial aid, their respective schools typically give them a list of lending agencies to go through. This is sometimes called a "preferred lender list."
According to a press release from Cuomo's office, a staggering 90 percent of students end up taking out loans from companies that appear on a school's preferred lender list.
This fact spells profits for businesses that are on the list, a distinct advantage over competing companies not listed as preferred.
What Cuomo found was that some of the largest banks in the country were offering money, stock and other assets to financial aid directors and departments in exchange to be on the preferred lender list.
This means the list would contain not the best loan options for students, but the best loan options for the people profiting off these revenue sharing agreements.
While SCSU was not one of the universities Cuomo found this to be happening at some of the colleges include St. John's University (in New York), Syracuse University, University of Pennsylvania and Fordham University.
Although the majority of these institutions are miles away from SCSU, the companies involved are not. They include national and international loan businesses Education Finance Partners, Citibank and Student Loan Xpress.
Cuomo filed suit with those involved, leading to reimbursement of some students, financial aid directors being put on leave and some of the nation's largest lending agencies adopting attorney general's student loan code of conduct.
AS 106
In this room on the SCSU campus is the Financial Aid office, which puts out something similar to a preferred lender list, called a Stafford Student Loan Open Lender List, and also an alternative loan lender list.
In most cases, this is true. But an investigation earlier this month by New York Attorney General Andrew Cuomo revealed a disturbing conspiracy of kickbacks in some of the nation's college financial aid offices.
When students apply for financial aid, their respective schools typically give them a list of lending agencies to go through. This is sometimes called a "preferred lender list."
According to a press release from Cuomo's office, a staggering 90 percent of students end up taking out loans from companies that appear on a school's preferred lender list.
This fact spells profits for businesses that are on the list, a distinct advantage over competing companies not listed as preferred.
What Cuomo found was that some of the largest banks in the country were offering money, stock and other assets to financial aid directors and departments in exchange to be on the preferred lender list.
This means the list would contain not the best loan options for students, but the best loan options for the people profiting off these revenue sharing agreements.
While SCSU was not one of the universities Cuomo found this to be happening at some of the colleges include St. John's University (in New York), Syracuse University, University of Pennsylvania and Fordham University.
Although the majority of these institutions are miles away from SCSU, the companies involved are not. They include national and international loan businesses Education Finance Partners, Citibank and Student Loan Xpress.
Cuomo filed suit with those involved, leading to reimbursement of some students, financial aid directors being put on leave and some of the nation's largest lending agencies adopting attorney general's student loan code of conduct.
AS 106
In this room on the SCSU campus is the Financial Aid office, which puts out something similar to a preferred lender list, called a Stafford Student Loan Open Lender List, and also an alternative loan lender list.