Get rich with no risk.

The classic business pitch is usually too good to be true – unless you're talking about the student loan business. Student loans, which banks and other lenders avoided in decades past, have become a creditor's dream...

This month, New York Attorney General Andrew Cuomo disclosed that the financial aid directors of three universities had held stock in Student Loan Xpress. Earlier, five other universities agreed to pay a $3.2 million settlement after an investigation by Cuomo's office revealed that the institutions were receiving payments from lenders...

And, as Cuomo's investigation revealed, some companies can gain an unfair advantage by cultivating relationships with financial aid officers at colleges and universities.

When students seek the advice of a financial aid office, they are often led to a list of “preferred lenders” that financial aid offices have presumably determined to be the best deals in terms of cost and service...

At many colleges, 99 percent of loans go to the first company on the preferred list, according to Stephan Burd, a fellow at the Washington, D.C.-based New America Foundation who has reported on the industry for 15 years...

For the complete article, please visit The San Diego Union Tribune website.