Press-Republican

Local News

Related Links

Discussion

PLEASE NOTE: There is a 150 word maximum for comments. All comments greater than 150 words in length will be deleted in their entirety.

ALSO NOTE: Derisive name-calling of an individual or group will result in the entire comment being deleted. This includes the terms "stupid" and "idiot" and similar references.

Welcome to our new online comments feature. Before you can join the discussion, you must first register with Disqus and verify your email address.

Once you do, your comments will post after they have been reviewed by a moderator.

We welcome your thoughts and your opinions, including unpopular ones. We ask only that you keep the conversation civil and clean.

Not all comments are deemed printable. Some are disqualified, at the newspaper’s discretion, for a number of reasons. Here are some typical practices to avoid in trying to get your comment printed:

There is a 150 word maximum for comments. All comments greater than 150 words in length will be deleted in their entirety.

Don’t state as a fact something that is unsubstantiated or that our editors wouldn't know to be true.

Don’t presume someone’s guilt in a case when it hasn't been established by a court.

Don’t assail or impugn an identifiable individual or group. If you have that kind of criticism, sign your name and submit it as a Letter to the Editor. (There is some leeway on this in connection with public officials, but it is not unconditional.)

Don’t use profanity. This includes the term “tea bagger.”

Don’t be incendiary or tasteless. Those qualities are subjective, of course, and our editors will be the arbiters.

Do not identify yourself in the main content area of the article content form. Only by enforcing this rule can the moderators prevent unscrupulous commenters from falsely identifying themselves as someone they are not.

Don't type in all caps. It is considered the Internet equivalent of shouting.

In sports articles, do not criticize officiating.

Remember, moderators are not allowed to edit any article comments. If an article comment fails any of the above criteria, the entire comment will be deleted.

We monitor comments Monday - Friday, 8 a.m. to 8 p.m. Saturday and Sunday, 2 p.m. to 8 p.m. Approval of comments outside these times may be delayed.
comments powered by Disqus
September 10, 2008

New York AG: 8 student lenders adopt new code

By CANDICE CHOI

NEW YORK (AP) — Eight student loan companies agreed to adopt a code of conduct that bans deceptive marketing practices — such as offering prizes to students who sign up for loans — following an investigation by the state of New York, the state attorney general said Tuesday.

Seven direct-to-student lenders agreed to pay a combined $1.4 million to settle the probe, Attorney General Andrew Cuomo said. These companies employed bait-and-switch tactics, pushed higher-interest private loans and marketed products so they appeared to be federal loans, he said.

Federal loans have fixed interest rates that are often lower than private loans.

The companies that are settling were identified by the attorney general's office as Nelnet Inc., Campus Door Inc., GMAC Bank, NextStudent Inc., Xanthus Financial Services Inc., EduCap Inc. and Graduate Loan Associates LLC.

An eighth lender, MRU Holdings Inc., was not a target of the investigation but voluntarily agreed to adopt the reforms. MRU Holdings, operating as My Rich Uncle, "wholeheartedly endorsed" the code of conduct, said Raza Khan, president and co-founder of the company.

MRU Holdings, based in New York City, has advocated more transparency in the industry for more than a year, Khan said.

Nelnet spokesman Ben Kiser said changes in the company's practices will occur in stages. Nelnet, based in Lincoln, Neb., should be fully compliant with the code of conduct by December.

EduCap, based in McLean, Va., issued a statement saying it welcomes "the opportunity to embrace the attorney general's proposed code of conduct."

A call to GMAC Bank was not immediately returned. A phone number listed on Graduate Loan Associates' Web site was not working and phone numbers could not be immediately found for Xanthus Financial or Campus Door.

Direct-to-student loan companies market to consumers online and through the mail, and don't necessarily have an on-campus presence.

The new code of conduct bans practices including:

—Using logos that make mailings appear to be from the federal government

—Paying students to get their friends to take out loans

—Offering prizes such as iPods, gift cards and GPS devices to induce students to take out loans with a particular lender

—Advertising interest rates that are not available to a majority of borrowers

The adoption of the code of conduct by the eight companies will put pressure on the entire industry to reform, said Barmak Nassirian, a spokesman for the American Association of Collegiate Registrars and Admissions Officers.

He said the greater transparency will help students and families make smarter choices about loans.

In announcing the settlement, Cuomo called on other companies in the industry to adopt the new code of conduct. Students and families should be wary of companies that fail to do so, he said.

Last week, Cuomo's office said it was preparing to sue Goal Financial LLC, based in San Diego, for similar deceptive practices. Unlike the other lenders, Cuomo's office said Goal Financial indicated it was not willing to enter into a settlement.

The settlements build on Cuomo's ongoing investigations into the burgeoning student loan industry.

Last October, Cuomo's office subpoenaed 33 direct student loan companies. Tuesday's announcement marks what is likely the first wave of settlements in the industry, Cuomo's office said.

Last year, Cuomo helped bring about reforms in the industry when his office investigated deals that gave colleges "kickbacks" in exchange for being listed as a preferred lender.

At least 22 schools agreed to adopt codes of conduct for financial relationships with lenders as a result. Several of the lenders targeted in that investigation agreed to reforms and to pay a combined $12 million into a national fund to educate families and students about loans, according to Cuomo's office.

Text Only | Photo Reprints
Breaking News
New Today
Local News

Recent Article Comments
Albany Round-up

Photo of the Day
Strange News
Videos: Editor Picks
Obama Scraps Birth Control Mandate US Airmen's Killer Sentenced to Life in Germany Raw Video: Deadly Blasts in Syria Romney Slams President Obama at CPAC Gingrich: Pres. Obama 'waging War on Religion' Navy Names Ship for Gabrielle Giffords 5 Killed in Wrong-way Crash on I-10 in La. Denver's Largest-Ever Drug Bust Nets Dozens Marines: No Punishment for Nazi-like Flag Vets Look to Translate Military Skills Into Jobs Raw Video: School Bus Burst Into Flames LA School Reopens Amid Sex Abuse Scandal $25B Settlement Reached Over Foreclosure Abuses Pentagon: Allow Women Closer to Front Lines LA School in Sex Abuse Scandal Reopens Raw Video: Italy's Mount Etna Bursts Into Life Greeks March; Angry Despite Debt Deal Air Force Airlines: Leaders Get Polished Service Ga Girl Fights Off Kidnapper at Walmart Skip the Coffee Cup and Inhale Your Caffeine Fix