The New York Attorney General and two U.S. Senators are targeting potentially unethical relationships between private lending companies and student financial aid offices across the country, but Georgetown does not seem likely to be affected, Dean Patricia McWade of the Office of Student Financial Services said Tuesday.
Andrew Cuomo, New York’s Attorney General, announced an investigation last Thursday into allegations that private lending companies have offered gifts to administrators in order to appear on “preferred lender” lists. Financial aid offices use these lists —which potential hurt students by favoring lenders demanding higher interest rates—to recommend private lenders to students and families.
Cuomo sent letters to eight lenders and over 60 colleges and universities requesting information on practices related to preferred lender lists. McWade said that Georgetown did not receive a letter and that the University gets the most competitive rates for students.
“They were really focused on schools that had made exclusive deals with lenders,” she said. “There were a few bad actors in this … Georgetown doesn’t do that. We never would.”
Sallie Mae, a publicly traded lender that offers one of Georgetown’s recommended loans, did receive a letter from Cuomo. Tom Joyce, a spokesman for Sallie Mae, said that the company will cooperate fully with the request. He said that Sallie Mae is confident in its marketing practices, and that increased government regulation would be detrimental to students.
“There’s a very sophisticated process that financial aid officers follow,” he said. “Those decisions are best made by those closest to the students, not bureaucrats in Washington.”
McWade agreed that the process is very complicated, saying that some private lenders may offer lower rates than the rest of the market, but may not be around in a few years.
Concurrent with Cuomo’s announcement, Senators Edward Kennedy (D-Mass.) and Richard Durbin (D-Ill.) introduced a bill to make relations between financial aid offices and private lenders more transparent. The bill, dubbed the Student Loan Sunshine Act, would require full disclosure of agreements between lenders and institutions of higher learning and annual reports of any gifts offered to colleges and universities by lenders.
McWade said that Georgetown is fully capable of justifying the rates it was finding for students and that the bill is a good idea. Scott Fleming, the University’s Assistant to the President for Federal Relations, did not respond to questions about the proposed legislation.The New York Attorney General and two U.S. Senators are targeting potentially unethical relationships between private lending companies and student financial aid offices across the country, but Georgetown does not seem likely to be affected, Dean Patricia McWade of the Office of Student Financial Services said Tuesday.
Andrew Cuomo, New York’s Attorney General, announced an investigation last Thursday into allegations that private lending companies have offered gifts to administrators in order to appear on “preferred lender” lists. Financial aid offices use these lists —which potential hurt students by favoring lenders demanding higher interest rates—to recommend private lenders to students and families.
Cuomo sent letters to eight lenders and over 60 colleges and universities requesting information on practices related to preferred lender lists. McWade said that Georgetown did not receive a letter and that the University gets the most competitive rates for students.
“They were really focused on schools that had made exclusive deals with lenders,” she said. “There were a few bad actors in this … Georgetown doesn’t do that. We never would.”
Sallie Mae, a publicly traded lender that offers one of Georgetown’s recommended loans, did receive a letter from Cuomo. Tom Joyce, a spokesman for Sallie Mae, said that the company will cooperate fully with the request. He said that Sallie Mae is confident in its marketing practices, and that increased government regulation would be detrimental to students.
“There’s a very sophisticated process that financial aid officers follow,” he said. “Those decisions are best made by those closest to the students, not bureaucrats in Washington.”
McWade agreed that the process is very complicated, saying that some private lenders may offer lower rates than the rest of the market, but may not be around in a few years.
Concurrent with Cuomo’s announcement, Senators Edward Kennedy (D-Mass.) and Richard Durbin (D-Ill.) introduced a bill to make relations between financial aid offices and private lenders more transparent. The bill, dubbed the Student Loan Sunshine Act, would require full disclosure of agreements between lenders and institutions of higher learning and annual reports of any gifts offered to colleges and universities by lenders.
McWade said that Georgetown is fully capable of justifying the rates it was finding for students and that the bill is a good idea. Scott Fleming, the University’s Assistant to the President for Federal Relations, did not respond to questions about the proposed legislation.
