"Our investigation was launched to determine whether colleges have been improperly steering students to preferred lenders that don’t have the best rates,’’ Rabner said. "What we would hope and expect is that colleges maintain preferred lender lists only with students’ financial interests in mind.’’
The investigation is similar to ones under way in other states, including New York. New York Attorney General Andrew Cuomo has said he has found cases of colleges getting a percentage of loan proceeds from lenders granted preferred status by the schools.
He also contends some college loan officers have received trips to luxury resorts and gifts from lenders.
In New Jersey, the Higher Education Student Assistance Authority recently ended its contract with Sallie Mae Inc., the country’s largest student loan firm, and said it would re-evaluate its practices amid scrutiny of the college loan industry.
The HESAA provides about $1.6 billion annually in financial aid to New Jersey students.
In addition to Sallie Mae, the following lenders were served with subpoenas: Student Loan XPress, Wachovia Education Finance, Nelnet, Dollar Bank, Academic Management Services, Education Finance Partners, JP Morgan Chase, United Bank & Trust, EdAmerica, TERI, Citibank, Bank of America, Campus Door, College Board, AFC, and Higher Education Solutions.
