<p>"CUOMO EYES BIG 'SCAM' ON CAMPUS
AP
March 16, 2007 -- ALBANY - Colleges are taking kickbacks from student-loan firms and reaping other benefits while making it harder for students to get better deals on their loans, Attorney General Andrew Cuomo charged yesterday. </p>
<p>Cuomo said an investigation that he began last month into the $85 billion student-loan industry had already found numerous arrangements that benefit schools and lenders over students. </p>
<p>He added that he'd warned more than 400 schools, including all the ones in New York state, to end such practices and was investigating at least 100, including some Ivy Leaguers. </p>
<p>Also being probed are these lenders: the College Board, the CIT Group, EduCap, Education Finance Partners, Nelnet, and SLM, the nation's largest. </p>
<p>Cuomo said some lenders: </p>
<ul>
<li><p>Pay kickbacks to schools based on a percentage of the loans directed to them. </p></li>
<li><p>Foot the bill for financial-aid officers' trip to resorts. </p></li>
<li><p>Give schools computer systems and put school reps on the lenders' advisory boards. </p></li>
<li><p>And set up funds and credit lines for schools that place them on "preferred lender" lists. "</p></li>
</ul>
<p>I am certainly no expert, but I have seen aid packages from the schools that have already sent an acceptance letter to my son and they have sent information to me on their preferred lenders. Just a little blurb, nothing big.</p>
<p>very interesting. One school sent us a list with 3 banks for loans and said if we did not pick one the college would and then listed the one they would pick.</p>
<p>Our school had a list- but you are not required to use one of them- the school just wants the money on time- they don't really have any say about where you get it from.
of course once they take the SATs you are deluged with info with college related materials, just as we weekly get about 5 mailings regarding our mortgage with offers to take a different one out with different lender and I lost count how many credit card offers we get.
\
We also got a lot of info through NELA,
but which is locally focused- but very helpful and info is free.
Just like any loan you would take out, you need to check it out re disbursment/repayment, etc.</p>
<p>Most banks give ed loans, there isn't any reason I can think of, that you couldn't go through your own bank to get a loan for school.</p>
<p>Sometimes the preferred lenders do offer better deals on interest. My daughter's Stafford lender, through her school, waives the loan origination fees and will knock down the interest rate one or two points automatically if my d. signs up for automated withdrawals of her monthly payment when she graduates. It's a good deal for her. Personally, if there is some sort of kickback to the college or a paid vacation for the financial aid director in exchange for that... I wouldn't care, it is still going to save my d. money in the end. (I doubt that there is anything fishy going on, knowing the lender and the school... but the point is, the bottom line is that my d. pays less than she would with a lender following the 'standard' practice of charging the full interest rate + an origination fee). </p>
<p>So I don't think you should avoid looking at the preferred lenders -- just check to make sure that the lenders are giving you the best deal available.</p>
<p>Sometimes, the preferred lenders list is solely comprised of lenders who the FAA's feel have the best customer service. In the Financial Aid section, I responded with how our office chooses our Preferred Lenders....and students are given a choice. They can choose to use one of our preferred lenders or any other approved Title IV lender. However, if they choose to use a different lender, there is the risk that their funds will be delayed, as we do not have electronic agreements with every Title IV lender out there. And I wish one of our lenders would give us a week long vacation....I could really use one about now!</p>
<p>Calmom--I got the same impression and the same deal. Actually, wouldn't be surprised if they use the same lender, given the closeness. It seemed like a good deal to us.</p>