Universities Settle Allegations Of Citibank Kickbacks For Student Loan Referrals
Eight universities agreed to stop accepting kickbacks from Citibank for private loan referrals, and five agreed to refund a total of $3.27 mil to thousands of students, following an investigation by NY Attorney General Andrew Cuomo (pictured).
The universities in cahoots with Citibank include New York University, University of Pennsylvania, Syracuse University, St. John's, St. Lawrence University, Long Island University, and the State University of New York.
And this is only the beginning. Coumo's office is currently "in negotiations" with around 60 other schools, and with other lenders.
Such arrangements create conflicts of interest, and harm consumers.
"Going to college is hard enough. Students shouldn't have to worry about being exploited when they take out student loans," said Sen. Edward Kennedy (D-MA) — BEN POPKEN
Millions to Be Repaid After College Loan Inquiry [NYT] (Thanks to Molly!)
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I believe there is a federal rule now which allows you to force the unis to stop selling your info to any/everyone. I received some sort of privacy notice from my Uni a few years back and chose to opt out of everything. Appears to have worked.
Holy Jesus and the Mary Chain - does this article reference St. Lawrence University? I never thought I'd see that school in the paper outside of Norther New York again...
So wait, do former students get anything out of this? SLU owes me big for agreeing to isolate myself in wilderness for 4 years...
I don't see the problem with this. Stafford loan interest rates and terms are dictated by the Department of Ed, and are EXACTLY THE SAME, regardless of lender. So, the school gets a little extra change, and the financial aid department's job becomes a lot easier because they have only one lender to deal with.
@ ReverendDrGladhands
This is about private loans.
Some excerpts from "U. settles over suspect student loan policies," which appears in today's issue of The Daily Pennsylvanian, the University of Pennsylvania's student newspaper:
"Penn will redistribute a total of $1,617,580 to students who have taken loans from the CitiAssist program offered by Citibank over the past two years.
"The settlement is a result of Penn's participation in a revenue-sharing agreement with Citibank, one of the preferred lenders that Penn recommends to students.
"In this agreement - which was not disclosed to students who took loans from CitiAssist - Penn was paid two percent of the principal amount each student borrowed, said Executive Vice President Craig Carnaroli. This money was then put back into funding financial-aid programs.
"CitiAssist is an optional, non-federal loan program for students who do not qualify for financial aid. It is primarily used by graduate and professional students.
"In the end, about 3,000 current and former Penn students who have participated in the program in the past two years will receive about $500 each."
"Going to college is hard enough..."
Ah, Ted, you got a good point, but not all students were expelled twice for cheating.
Oh man.
Wait until they lift the lid on Loan to Learn!
what?! no way, i would have never figured big business in bed with the university system! i am so shocked... not.
Now if we could get them to stop selling our information to credit card companies...