Cuomo: Student loan code inadequate

Published May 20, 2007

WASHINGTON - New York's attorney general criticized college financial aid officials Saturday for proposing a code of conduct he said fails to curb abuses in the student loan industry that his office has uncovered.

Andrew Cuomo, whose office has investigated the industry for months, made his views known in a letter to the group that represents aid officers.

"The code you have proposed is inadequate in that it does no more than recite vague, lofty goals of generalized ethical behavior, " Cuomo wrote Dallas Martin, president of the National Association of Student Financial Aid Administrators.

A lawyer for the association said the group had sent Cuomo's office a revised proposal. But a Cuomo spokesman said the office had not received an updated code.

His code bans colleges from receiving anything of value from a student loan company in exchange for an advantage sought by that company. That includes a ban on trips for financial aid officers paid for by lenders. Student loan officers also cannot accept anything of value for serving on a lender's advisory board.

In a draft proposal, the association said loan officers should not be allowed gifts but it was okay to accept "reimbursement of actual and reasonable expenses" for serving on advisory boards or for participating in a training activity sponsored by the industry, according to documents obtained by the AP.

Cuomo, in his letter to the group, said that was a major problem.