College Officials Profited By Selling Stock In Lending Companies They Recommended To Students

The financial aid directors at Columbia University, the University of Texas at Austin and the University of Southern California profited from selling stocks in a student loan company on the “preferred lender list” at each of the universities.

The revelations are the latest as the scope of NY Attorney General Andrew Cuomo’s investigation into the conflicts of interest between colleges and loan companies expands.

Students often do not comparison shop and rely heavily on the lender recommendations made by their schools.

Yesterday The National Association of Student Financial Aid Administrators said it, “believes it would be inappropriate for a school to place a lender on a preferred lender list in exchange for shares of stock..” — BEN POPKEN

College Officers Profited by Sale of Lender Stock [NYT]

Comments

Edit Your Comment

  1. Cap'n Jack says:

    It’s a small matter. The entire scholastic system is flawed. When are we going to fix that?

  2. tourpro says:

    “Yesterday The National Association of Student Financial Aid Administrators said it, “believes it would be inappropriate for a school to place a lender on a preferred lender list in exchange for shares of stock..”

    Uh, yeah.

    The loan companies have already taken their many pounds of flesh from me. I’ve always asserted that the Financial Aid Office and Admissions Office of a university are the loan-sharks and snake-oil sellers of education.

  3. katana says:

    “Yesterday The National Association of Student Financial Aid Administrators said it, “believes it would be inappropriate for a school to place a lender on a preferred lender list in exchange for shares of stock..””

    ya don’t say…

    there’s a river of dirty money flowing through America’s colleges and universities with the majority coming from these loan peddlers and scum pitching credit cards out on the lawn

  4. officedrone4 says:

    “I’ve always asserted that the Financial Aid Office and Admissions Office of a university are the loan-sharks and snake-oil sellers of education.”

    bitter much tour pro?

    i happen to know many people who work in both offices at one of the universities involved. they are good, honest people, who believe in the power of education. right now they are trying to transition away completely from loan based financial aid.

    not all of the problems of higher education are the result of the administration. and none of those schools listed provide a less than excellent education. in order to be a snake oil salesman, your product needs to be useless. that is certainly not the case here. the product is an excellent university education.

    and as far as loan sharks go, my student loan payments have an interest rate of under 3%. and hardly loan sharky. even now that interest rates have gone up theyre still quite low compared to other investments.

  5. capstinence says:

    So since I just graduated from USC, does that mean I can get some of my money back? :)

  6. mac-phisto says:

    @officedrone4: yeah, but you’re not talking about private loans which is what this is all about. the reason your loan is under 3% is b/c the government is subsidizing the lender & guaranteeing that come hell or high water, you will pay it back.

    private loans get the same protection, but at a much higher cost to the borrower.

    & i can see the snake-oil reference to a point. a degree is nothing more than an expensive piece of paper. there is nothing that a college graduate can do that a self-taught or trade-taught person cannot do. many (including myself) would argue that what you are really paying for is network access.

  7. No credit for the tip I sent over a day ago for this? Lame.

  8. orielbean says:

    The point of the liberal arts college education is the ability to parse lectures & material and spit it back to the target in whichever form they ask. Businesses ask for a degree b/c they can then somehow assume you possess those particular skills. Trying temping somewhere if you don’t have a degree, as real-world experience will often work just as well vs a bachelor’s degree in a non-science field.

  9. Gopher bond says:

    A degree protects the person hiring you. Can you imagine an HR person hiring someone that dropped out of high school because they seemed intelligent, had relevant experience, and able to do the work and then the person turns out to be a thief or jackass? That HR person would be fired on the spot.