Student Loan Companies Agree to "Code of Conduct"

Attorney General Andrew Cuomo has made misleading practices in the student loan industry one of his major issues (see the AG's info on student lending), and yesterday he announced seven companies will follow a "code of conduct for their marketing". Campus Door, EduGap, GMAC Bank, Graduate Loan Associates, Nelnet, Nextstudent and Xanthus were found to have questionable practices--mailing fake checks or false rebates, offering gifts (iPods) to distract from "sometimes onerous" loan terms, and making false representations about private loans being better than lower-cost federal loans. Cuomo said, "I commend the eight lenders who have today signed the code... It is unconscionable for lenders to entice students into loans that are not best for them.”