Cuomo’s Office Signs ‘Code of Conduct’ with Large Loan Company

Angela Januzzi

July 20, 2007

In the ongoing controversial legislation involving the reauthorizing of the Higher Education Act and its related measures, which would cut government subsidies to lenders and instead raise the federal Pell Grant, The Bush Administration seemed less adverse to the Senate-approved version of the bills than the House’s. Even while both houses have passed the legislation, however, there are immense changes still expected—especially to the measure requiring loan companies’ student forgiveness after payments have been made for a certain number of years--to be made before the legislation goes into effect.

Still, the acquiescing of lenders to more ethical practices is occurring outside Capitol Hill, as well. Andrew M. Cuomo, the New York attorney general who first drew attention to lenders’ questionable practices with student borrowers, came to an agreement with one of the largest loan companies in the country.

Cuomo’s office announced Thursday that The College Loan Corporation has signed a Code of Conduct agreeing not to offer colleges or universities any incentives to use their business over others (e.g. loan “counseling sessions” for students which were instead being used as marketing opportunities, or meals and entertainment for college staff). Tracy Neumann, senior vice president of the company, is quoted as saying: “We’re pleased this matter is resolved with the New York State attorney general.”

Source: Schemo, Diana Jean. “Large Student Lender Agrees to Code of Conduct, Settling New York Inquiry.” www.nytimes.com. Posted: July 20, 2007.