6 more colleges agree to lender guidelines
NEW YORK -- Six US colleges and universities, including Manhattanville College in Purchase, N.Y., and Texas Christian University in Fort Worth, agreed to adopt new codes of conduct in doing business with student lenders.
The agreements bring to 21 the number of schools that have committed to the College Loan Code of Conduct, according to New York Attorney General Andrew M. Cuomo. Texas Christian agreed to reimburse more than $13,000.
The agreements stem from investigations Cuomo is coordinating with his counterparts in more than 40 states examining the $85 billion student-loan industry. Cuomo's inquiry has revealed that lenders provided revenue sharing, company stock, and other payments to financial-aid officers and schools that recommended them to students and parents.
"Schools and lenders are no longer defending these practices or refusing to recognize the problem -- they are looking for a solution," Cuomo said.
The other schools included in the announcement are Lewis & Clark College, Portland, Ore.; Marist College, Poughkeepsie, N.Y.; and Mercy College and Pratt Institute, both of New York City.
Texas Christian had a revenue-sharing agreement with San Francisco-based Education Finance Partners Inc. through which it received $13,883. Under the agreement, the school will reimburse students.
Lewis & Clark received $5,000 from Education Finance, the state said. It returned the money. Manhattanville College took printing services from lenders, and one lender bought theater tickets for a college employee.
"Marist wasn't engaged in any of the egregious practices that were found at other colleges and universities," Marist spokesman Tim Massie said. "For us it only codifies the practices our financial aid office already has in place."
Carl Vance, vice president at Lewis & Clark, said in a statement, "We believe it wiser to avoid even the appearance of impropriety in the way we work with lenders serving our students and families, and our action is aimed at accomplishing just that."
Mercy College agreed to give $5,000, the amount it received in goods and services from various lenders, to Cuomo's office to help create an education program.
Pratt Institute and Texas Christian spokeswomen said their schools didn't have immediate comments. A Manhattanville spokeswoman didn't return a call for comment.
The federal government backs most lending to students through a variety of programs, with about 80 percent of the money routed through banks and other agencies. Lenders also make loans that aren't federally backed.
Colleges and universities often list recommended or "preferred" lenders on their websites and brochures to help students and families sort through their options. Preferred institutions account for 90 percent of money borrowed.
Cuomo has targeted 20 lenders and about 100 colleges and universities. Five loan companies and the 21 educational institutions have agreed to abide by new codes of ethics and have paid a total of $9.9 million to educate or reimburse borrowers.
"Colleges are prohibited from receiving anything of value from any lending institution in exchange for any advantage sought by the lending institution," the code says.
