WASHINGTON, DC (April 11, 2007) – New York Attorney General Andrew Cuomo today announced that Sallie Mae has agreed to pay a $2 million dollar settlement and adopt a new code of conduct in response to ongoing investigations into the relationship between lending institutions and universities. In addition to this announced settlement, Cuomo’s office continues to investigate apparent improprieties involving lenders such as Student Loan Xpress, financial aid administrators, and a number of high profile universities.
New America’s Higher Ed Watch blog first broke the story on Student Loan Xpress in posts on April 4th, 5th and 10th. Front page follow up stories appeared in The New York Times and other major media outlets across the nation. In response to today’s announced settlement, Michael Dannenberg, director of New America’s Education Policy Program made the following statement:
“The New York State Attorney General’s settlement with Sallie Mae sends a message to student loan banks that they are to stop cozying up to universities and compromising the ethics of college officials in order to lock young people into high interest rate student loans. It will be a disappointment if these investigations and settlements, however, do not result in cheaper loans for students. The ultimate success of these student loan investigations will be measured by the degree to which they result in cheaper college loans for students and families. Right now, students are paying interest rates for college loans that are simply too high.”
“The New York State Attorney General should use today’s announced $2 million in settlement money to create a lendingtree.com for student loans. If we can have a lendingtree.com for home mortgages, we can have one for student loans too. Families and students would get cheaper loans and there would be less incentive for the type of unseemly activity that we’ve seen uncovered in recent weeks.”
The New America Foundation is a non-profit, non-partisan think tank based in Washington, DC. New America’s Education Policy Program focuses on modernizing our systems of school finance, teaching and learning, and college financial aid. The program proposes comprehensive changes to education policy from pre-kindergarten to graduate school, so that all Americans can benefit from extended learning time, improved teaching and curricula, and full and fair access to primary, secondary, and higher education.