| You have probably seen news stories about the | | | | recommends. That would be fine except this |
| preferred lender lists that most colleges have and | | | | investigation has shown the names on that list may |
| alleged misconduct by some lenders and financial aid | | | | not all be there because they are the best option for |
| officers. There have been a lot of accusations and | | | | the student. A few financial aid officers and schools |
| some admissions, but what does this all mean to | | | | have received financial benefits from a few lenders |
| you? What if your school is one of the ones being | | | | (called inducements) for encouraging their students to |
| investigated? | | | | use them. As an example some lenders have |
| The majority of people who work in the financial aid | | | | allegedly contributed to the school's scholarship funds, |
| office of your school are on your side and work very | | | | paid for officers to travel to island resorts for |
| hard to make sure their students receive the best | | | | "meetings", given officers high paying consultation |
| loan information possible. But just like any other | | | | jobs, provided gifts and cash bonuses to officers, |
| industry, there will always be a couple bad apples. So | | | | paid a percentage of the loans generated back to |
| far 6 colleges have suspended or fired their financial | | | | the school, given officers stock in the lender's |
| aid directors over inappropriate relationships with | | | | company. There is currently a congressional summit |
| lenders. Several lenders have agreed to pay into a | | | | going on to discuss these lender inducements, |
| fund set up to educate students and their families | | | | preferred lender lists, and any other issues left |
| about their financial aid options, some of them up to | | | | unresolved from the last summit. |
| two million dollars. Financial aid officers from more | | | | There has already been a profound effect within the |
| than 100 schools have been questioned. The general | | | | higher educational community. Many schools have |
| manager of the Department of Education's financial | | | | voluntarily ended lender agreements that could be |
| partners services has been suspended. What exactly | | | | seen as biased, adopted the new guidelines for |
| is all the fuss over? | | | | conduct drafted by New York Attorney General |
| Almost all colleges and universities have a preferred | | | | Andrew Cuomo and repaid any money received from |
| lender list available for their students. The purpose of | | | | lenders to their students through scholarships and |
| the list was to give students several options of | | | | student benefits programs. The NY Attorney |
| companies that the college has found to be fair and | | | | General's office has announced one intended lawsuit |
| honest in their dealings. Even though you are not | | | | already and several other states Attorneys General |
| required to choose a lender off of the list - federal | | | | have started their own investigations. No one is sure |
| law states you may use any lender you wish - most | | | | what this will mean to individual students, but the |
| students just picked one of the ones their school | | | | times are definitely changing. |