Local Colleges Not Involved With Student Loan Investigation

By Justin Moss

July 22, 2010 Updated Apr 23, 2007 at 6:49 PM EDT

Here at Binghamton University, about 7 thousand students need loans to pay for school.

The college recommends certain lenders to its students.

But it's these so-called "preferred lender lists" that are causing a lot of controversy.

Some schools steer students toward certain lenders, in exchange for perks.

"There is no kickbacks, there is no airplane tickets that have been issued to any employee," says Financial Aid Director Dennis Chavez..

Chavez says that's not the case here at BU.

It does have a preferred lender list.

But students are free to make choices.

"We have 5 lenders that we tend to recommend, on the other hand, we will process any application from any loan," says Chavez.

Here at Broome Community College, the college gives students a lender worksheet.

It includes about 12 lenders the school works with a lot.

"So we're looking for lenders that offer students, exceptional service, they offer them benefits in terms of interest reduction and this sort of thing," says Douglas Lukasik, of BCC Financial Aid.

Lukasik says these lists actually help students make choices.

And they help the college process loans easier.

Students are still free to choose any lender.

Lukasik adds that it's appalling schools would accept gifts from loan companies.

He says a school's main focus should be making sure students can afford an education.

New York Attorney General Andrew Cuomo is leading an investigation into student loan corruption.

While the entire State University of New York system was named, SUNY New Paltz is the only 4 year state school that admitted to having a pact with a loan company.

Cuomo has reached settlements with many colleges, in and out of state, to stop accepting perks from lenders in return for steering business in their direction.

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