New York Attorney General Settles with Schools: Major Universities Will Adopt New College Code of Conduct and Repay Students
By Brooke Heath
In an ongoing course of action, New York Attorney General Andrew M. Cuomo announced Monday that his office had signed settlements with major universities. The terms of the settlements require schools to adopt a new landmark College Code of Conduct governing arrangements with student loan lenders as well as reimburse students money that was paid to the schools by lenders for loan business.
According to a press release from Cuomo's office, settlements were signed with the following schools: the State University of New York's 29 four-year campuses, Fordham University, Long Island University, New York University, St. Lawrence University, Syracuse University, and the University of Pennsylvania.
The Attorney General's College Code of Conduct forbids student loan lenders from sharing revenue with schools, includes disclosure standards and restrictions on schools' "preferred lender" lists, and prohibits gifts or trips given to school employees by lenders. The Code of Conduct also bans lenders from providing staffing or paying for the staffing of any component of a school's financial aid office, in addition to delimiting other aspects of associations between lenders and schools.
Cuomo said, "The College Code of Conduct spells out in black and white that no lender may pay a school for placement on a preferred lender list and no school may hide the reason it chose to recommend a particular lender."
As the other condition of the settlement, the schools involved will make the following reimbursements to students:
New York University: $1,394,563.75 for loans issued over a five-year period.
St. John's University: $80,553 for loans issued over a one-year period.
Syracuse University: $164,084.74 for loans issued over a two-year period.
Fordham University: $13,840 for loans issued over a one-year period.
University of Pennsylvania: $1,617,580 for loans issued over a two-year period.
Long Island University: $2,435.41 for loans issued over a one-year period.
The money will be disbursed to individual students on a pro-rata basis, contingent upon the amount each student borrowed in student loans and the interest rate he or she was given. Money designated for students who cannot be found will go toward a fund to educate college-bound students about the student loan industry.
Cuomo said, "[W]e are beginning the process of restoring trust between universities and students, and now is the time for other schools and lenders to step up and end the conflicts, perks, and revenue sharing that have been costing students in New York and across the country dearly."
Article Title : New York Attorney General Settles with Schools: Major Universities Will Adopt New College Code of Conduct and Repay Students
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