Student Loan Probe
My hero for the week is New York Attorney General Andrew Cuomo, who may sue Drexel, and other colleges and universities, over an illegal revenue sharing agreement with Education Finance Partners, Inc. The Agreement called for illegal kickbacks to schools promoting the California based lender as its “sole preferred private loan provider.”
“Drexel must require lenders to compete for students’ loans by offering the best loan products to students, not the best kick-back to Drexel,” says Benjamin M. Lawsky, Cuomo’s deputy counselor. Other schools, including my alma mater, have agreed to reimburse students the money the colleges were paid by lenders in exchange for loan business.
This helps me feel a little better every time my monthly student loans are deducted from my bank account. So does the fact that Education Finance Partners agreed to end the revenue sharing and pay $2.5 million into a fund to educate students about college borrowing. Sallie Mae and Citigroup will contribute to the fund as well. It is about time. So many helpless students borrow, excited to get that big refund check each semester, yet have no idea about the long term ramifications.
The recent considerable progress should go even further. Each school should hold accountable every employee, staff, or administrator who knew about this and/or participated in the decision to sign on to these illegal agreements. It is so wrong. Punishment should be greater than just universities paying back a little bit of change to rectify the situation. Individuals must be punished with the loss of jobs. Also, it is ashame that the lending groups would think to devote funds for educating students on borrowing only when their arms are twisted.
To be positive, but just for one sentence, I am very glad something finally is happening to protect many vulnerable students from the burden of student loan debt that many students live with for many years after graduation.