The Department of Education wants you to know that they’ve sent warning letters to 921colleges and universities warning them not to limit students in their choice of lenders, according to the Chicago Tribune.
Jeff Baker, policy liaison at the Education Department’s federal student aid office, said a search of a student loan database showed that a vast majority of students at each of 921 campuses chose the same lender.
“That was a little flag to us that perhaps the institution isn’t quite being open enough to their students and parents,” Baker told thousands of college financial aid officials gathered for the annual conference of the National Association of Student Financial Aid Administrators.
The letter, dated June 29, marks the first time the department has sent targeted letters to campuses in regards to their use of preferred lender lists.
Baker said that campuses could face fines or be barred from participating in the federal lending program, known as FFELP, if they violate the department’s student loan policies. That also includes a prohibition that bans college administrators from accepting gifts, payments or other perks in exchange for steering student borrowers to a particular company.
We love how this just occurs to them now.
College-loan warnings sent [Chicago Tribune]