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AGs Cooperate in Student Loan Probe

Posted Apr 24, 2007 10:58 AM CDT
By Debra Cassens Weiss

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Attorneys general from Illinois and Missouri are the latest state legal officers to force student loan companies to change their practices, the Washington Post reports.

Washington University in St. Louis, DeVry University and Career Education Corp. pledge in settlement agreements to reject referral fees for sending business to favored lenders. The schools agree to share referral fees or profits from loans that were steered to preferred lenders with students or loan education efforts.

Last week, lender Nelnet Inc. settled with the Nebraska attorney general.

More agreements are expected, the Post says. More than 40 state attorneys general are cooperating with New York Attorney General Andrew Cuomo’s investigation of the student loan industry.

"I'm very proud that attorneys general across the country are stepping up to the plate," Cuomo said at a news conference.

Cuomo's probe has resulted in agreements with Sallie Mae and other lenders, the Wall Street Journal (sub. req.) reports.

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