As families wade through college financial aid options this month, they will find the path to a degree is paved with perilous debt.

With rising tuition and fees, students have increasingly turned to government and private loans over the past decade, with graduates owing an average of $20,000.

The borrowing frenzy has helped fuel deceptive practices among private lenders and colleges that put students and parents at risk of making poor financial choices, say law enforcement officials and education experts.

The $85 billion student loan industry has come under intense scrutiny in the past few months. Much of the heat is coming from New York Attorney General Andrew Cuomo, whose widening probe has revealed dozens of universities have accepted financial incentives from lenders.

An "unholy alliance" exists between lenders and colleges, Cuomo said. His investigation found lenders paying kickbacks to colleges for steering students to them by putting the companies on "preferred lender lists," as well as financial aid officials accepting gifts from lenders, including trips to high-end resorts...

Steve Burd of the New America Foundation, a nonprofit think tank that uncovered the stock arrangements, said the discoveries are "alarming."

"Students are looking for impartial advice, and the hint that there's self-interest on the part of any financial aid officer is troubling," Burd said...

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