Skip to main navigationSkip to News Headlines
Global Navigation
Office of The Attorney General
The State of New Jersey Office of The Attorney General (Dept. of Law & Public Safety) The State of New Jersey NJ Home Services A to Z Departments/Agencies OAG Frequently Asked Questions
Services A to Z Departments/Agencies OAG Frequently Asked Questions
OAG Home
OAG Contact
Back to News Releases
more news
OAG Home Attorney General's Biography
Attorney General's Biography
spacer spacer spacer
 
spacer spacer spacer
spacer spacer spacer
For Immediate Release:  
For Further Information:
spacer spacer spacer
May 4, 2007  

David Wald
609-292-4791

Office of The Attorney General
- Stuart Rabner, Attorney General

spacerspacer spacer spacer
spacer spacer spacer
spacer

Attorney General Issues Civil Subpoenas in College Loan Probe
Division of Consumer Affairs Investigating Allegations That Lenders Have Made Improper Payments to Promote Lending Programs

spacer
spacer spacer spacer
spacerspacer spacer spacer

Trenton, NJ – Attorney General Stuart Rabner announced today that his office and the Division of Consumer Affairs have launched an investigation into the student loan industry in New Jersey in light of recent allegations that lenders have made improper payments to have colleges promote specific loan companies to students. Sixty-one colleges and universities in the state, the New Jersey Higher Education Student Assistance Authority, and 17 student loan providers were issued subpoenas in the last two days.

“It is unacceptable for the high cost of college to be compounded by student loan rates inflated by too cozy relationships between colleges and lenders,” Attorney General Rabner said. “Our investigation was launched to determine whether colleges have been improperly steering students to preferred lenders that don’t have the best rates. What we would hope and expect is that colleges maintain preferred lender lists only with students’ financial interests in mind.’’

Many colleges and universities have preferred lender lists that students look to in deciding what lender they should use to finance their education. Recent investigations around the country, and in particular in New York, have revealed that some banks are paying to become preferred lenders. The Attorney General is concerned that by accepting such compensation, colleges and universities may be putting their own interests ahead of their students.

The subpoenas seek information on revenue sharing agreements, agreements to promote lenders, benefits schools and financial aid officers may have received, including direct payments, dinners, golf-outings, and travel expenses. The subpoenas also seek information as to whether lenders’ employees have provided direct assistance to financial aid offices, allowing these lenders to have preferred access to student loan borrowers.

First Assistant Attorney General Anne Milgram is overseeing the state’s investigation.

“We will seek to determine whether students’ interests have been harmed by any arrangements,’’ Rabner said. “From the information we receive we should be able to assess what reforms may be necessary.’’

Lenders served with subpoenas include Student Loan Xpress, Sallie Mae, Wachovia Education Finance, Nelnet, Dollar Bank, Academic Management Services, Education Finance Partners, JP Morgan/Chase, and United Bank & Trust.

Also to be served with subpoenas are EdAmerica, TERI, Citibank, Bank of America, Campus Door, College Board, AFC, and Higher Education Solutions.

# # #

spacer spacer spacer
spacer spacer spacer
spacer spacer spacer
 
Contact OAG About OAG
OAG News OAG Frequently Asked Questions
OAG Library Employment
OAG Grants Proposed Rules
OAG History OAG Services A-Z
OAG Agencies / Programs / Units
Other News Pages Division of NJ State Police NJ State Police News Governor's Office News Division of Highway Traffic Safety News Office of the Insurance Fraud Prosecutor Juvenile Justice Commission News Division on Civil Rights News Division of Consumer Affairs News Division of Criminal Justice News Election Law Enforcement Commission Division of Elections News Division of Gaming Enforcement News
NJ State Police News Governor's Office News Division of Highway Traffic Safety News Office of the Insurance Fraud Prosecutor Juvenile Justice Commission News Division on Civil Rights News Division of Consumer Affairs News Division of Criminal Justice News Election Law Enforcement Commission Division of Elections News Division of Gaming Enforcement News Office of Government Integrity News

free PDF plugin

NJ State Police News Governor's Office News Division of Highway Traffic Safety News Office of the Insurance Fraud Prosecutor Juvenile Justice Commission News Division on Civil Rights News Division of Consumer Affairs News Division of Criminal Justice News Election Law Enforcement Commission Division of Elections News Division of Gaming Enforcement News Office of Government Integrity News
   
Contact Us | Privacy Notice | Legal Statement | Accessibility Statement
NJ Home Logo
Departmental: OAG Home | Contact OAG | About OAG | OAG News | OAG FAQs
Statewide: NJ Home | Services A to Z | Departments/Agencies | FAQs
Copyright © State of New Jersey
This page is maintained by OAG Communications. Comments/Questions: email or call 609-292-4925
OAG Home OAG Home NJ State Police News Governor's Office News Division of Highway Traffic Safety News Office of the Insurance Fraud Prosecutor Juvenile Justice Commission News Division on Civil Rights News Division of Consumer Affairs News Division of Criminal Justice News Election Law Enforcement Commission Division of Elections News Division of Gaming Enforcement News Office of Government Integrity News