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this is an article i found that i think would interest everyone....



Schools for scandal


Every year, millions of students and their parents go deep into hock to pay for a college degree. The last thing they need is to get bad advice on student loans from people who profit from their ignorance.

Now, an investigation by state Attorney General Andrew Cuomo shows that this is exactly what is happening around the country.

Cuomo's probe of 100 colleges and six lending firms has exposed a slew of dirty business practices among private lenders, a largely unregulated industry that affects 90% of U.S. college students and did $85 billion in business last year alone.

Schools get bonuses from private lenders when their students take out loans; the bigger the loan, the bigger the payoff. They get even more if they put the companies on preferred-lender lists. College administrators get gifts and trips. The companies even staff university financial aid call centers, passing themselves off as school administrators giving students unbiased advice.

No wonder many parents suspect a huge scam.

Subpoenas issued by Cuomo's office have found that, for example, a financial aid officer at Columbia made more than $100,000 from stock options in the Education Lending Group. He was suspended, as were officials at the University of Texas and the University of Southern California. SUNY Chancellor John Ryan sat on the board of a company called CIT Group, a preferred lender at SUNY Maritime College, where he was president. An official in the federal Education Department whose job it was to oversee student loans earned $100,000 from stock in Education Lending Group.

And that's just the tip of the iceberg. the probe is due to last another four or five months, and other states' attorneys general are expected to get on board.

Already, some prominent players are scrambling to clear their names. NYU, Syracuse, St. John's, Fordham and the University of Pennsylvania are paying back a total of $3.2 million to students. Citibank is putting $2 million into a fund to educate students and parents about loans. Yesterday, CIT put three top executives on paid leave. And dozens of universities, including 29 SUNY campuses, NYU, LIU, St. John's and Fordham, plus Citibank, have taken Cuomo up on an offer to adopt a code of conduct: No more so-called revenue sharing; no more gifts; students will be told why a company merits preferred-lender status.

The colleges should be deeply ashamed, and they owe students far more than just a promise to behave. They can start by getting out of the loan business altogether.

In this information age, there's no need for a university to be sponsoring a preferred-lender list. Students would be better served by a loan discussion board that listed all possible lenders, with interest rates and terms. Then the parents could rank them. You get a far more honest assessment from people paying the bills than from people taking money under the table.