Mass. AG to investigate college loans

The office of Massachusetts Attorney General Martha Coakley said today that she has launched an investigation into deceptive practices in the college loan industry.

"Our offices is investigating the nature of the relationships between colleges and lenders and whether any practices involved are inappropriate of illegal," Coakley said in a statement.

Coakley isn't the only elected official interested in the college loan debate.

Earlier this week, the New York Legislature approved the passage of legislation to protect students and their families from conflicts of interest in the student-loan industry; a leading advocate of the legislation is New York Attorney General Andrew M. Cuomo, according to a statement issued by Cuomo's office.

And this morning the U.S. House of Representatives easily approved a bill aimed at curbing conflicts of interest and corrupt practices in college lending.

The bill would ban gifts from lenders to schools and impose strict controls on schools that publish approved lender lists to guide students to certain loan companies. Lenders and schools would have to make their business dealings more transparent to borrowers, disclosing terms, conditions and any incentives involved.
(By Chris Reidy, Globe staff with wire services)