AG Faults Oversight of College Loans

“The Department of Education was asleep at the switch, but so were the banking regulators _ who must now wake up and act.”

Rampant abuses by lenders have followed a boom in higher-priced college loans not guaranteed by the government, and lax federal oversight has made the situation worse, New York's attorney general said Wednesday.

Andrew Cuomo told Congress his office has begun investigating lenders for possible discriminatory practices involving the criteria used for pricing student loans. Such criteria may include where a student lives and what type of college he attends, Cuomo suggested.

Already, his office has taken on student lenders and college financial aid officials over conflicts of interest. That includes kickbacks to college officials for steering students toward particular lenders. Read more