The companies agreed to new standards that ban solicitations designed to look like they were from the government; prohibit advertising interest rates unavailable to most of their borrowers; bar prizes and other contests to entice clients; and stop payments to students who get friends to take out loans, according to a statement today from Cuomo’s office.
Cuomo has been probing the $85 billion student-loan industry since he took office in 2007 for conflicts of interest that included payments and perks to colleges and financial-aid officers. About a dozen lenders and 26 colleges and universities earlier reached agreements to cut financial ties and abide by a code of conduct.
“These settlements are a major step forward in cleaning up an industry where false and misleading advertising practices have been all too rampant,” Cuomo said in a statement today. Read full story. (Bloomberg.com)