Columbia Reaches Agreement in Loan Probe
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NEW YORK (AP) – Columbia University and a national financial aid organization have reached an agreement aimed at ridding the student loan industry of kickbacks and corruption, state Attorney General Cuomo said Thursday.
Under the agreement, part of Cuomo’s ongoing investigation into financial aid practices, both Columbia and the National Association of Student Financial Aid Administrators said they would adopt a code of conduct that bans such practices as lender gifts to college financial aid officers.
Mr. Cuomo said that when he began his investigation many were skeptical of the extent of the corruption. “It was just hard to believe that this actually could be going on,” he said.
Dallas Martin, president of NASFAA, said he was defensive when he first learned of Mr. Cuomo’s claims.
“Today I want to apologize to him and say that I was wrong. We didn’t have all the facts,” said Mr. Martin, who joined Mr. Cuomo at a Manhattan news conference.
Columbia, which did not have a representative at the news conference, has agreed to pay $1.1 million into a fund to educate high school students and their parents about the student loan industry, Mr. Cuomo said.
A spokeswoman at Columbia said the school had no immediate comment.
Earlier this week, San Francisco-based Wells Fargo agreed to abide by Mr. Cuomo’s code of conduct. Wells Fargo is among the nation’s five largest lenders to agree to abide by the code.
Earlier, Mr. Cuomo had reached agreements with Citibank, Sallie Mae, JP Morgan Chase, and Bank of America. There were also agreements with Education Finance Partners (EFP) and CIT, which is now the parent company of Student Loan Express. Sallie Mae, Citibank, EFP, and CIT also agreed to contribute $9.5 million to a national fund to educate high school students and their families about the college aid process.
Mr. Cuomo’s probe includes more than 100 schools. St. John’s University, Fordham University and Long Island University have reached agreements with the attorney general.
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NY attorney general’s office: http://www.oag.state.ny.us/
