Student-Loan Companies Settle With State For $1.4M
-
- September
- 9
Major student-loan companies agreed today to stop sending deceptive direct-mail pieces to borrowers and to put $1.4 million into a fund to help families pay for college loans, Attorney General Andrew Cuomo announced.
Cuomo said eight lending companies will adopt new reforms to their direct marketing campaigns that often had included phony solicitations to get students to take out new loans or refinance existing ones.
The agreement bans direct mail pieces that look like they come from the federal government or advertise interest rates that are not available to a majority of borrowers. Other mailings offered prizes and run contests to attract students to take out loans with a particular lender.
“These settlements are a major step forward in cleaning up an industry where false and misleading advertising practices have been all too rampant,” Cuomo said in a statement.
The eight student lenders are: Nelnet Inc.; Campus Door Inc.; GMAC Bank; NextStudent Inc.; Xanthus Financial Services Inc.; EduCap Inc.; Graduate Loan Associates, L.L.C.; and MRU Holdings Inc., doing business as My Rich Uncle.
The companies, except for MRU Holdings which voluntarily adopted the reforms, have agreed to deposit $1.4 million into the attorney general’s national fund that is used to help students and their families with the financial aid process.
This entry was posted
on Tuesday, September 9th, 2008 at 12:21 pm by Joseph Spector.
You can follow any responses to this entry through the RSS 2.0 feed.
| 
Email This
Can you help me? I’m trying to subscribe to your RSS feed, but can’t seem to figure it out. Did you have that option in your blog? Really like it, BTW.
Well said, finally a good report on this stuff