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MARK AUSTIN THOMAS: New York’s Attorney General has written to 400 colleges throughout the U.S. He wants them to end cozy relationships they have with lenders. Ashley Milne-Tyte explains in this report.
ASHLEY MILNE-TYTE: Attorney General Andrew Cuomo says some lenders give cash commissions to schools, others send financial aid officers on exotic vacations — all so that schools will promote their loan.
ANDREW CUOMO: They also simultaneously limit the number of lenders that are provided access to the students, and the lenders will actually pay the school more for the lack of competition.
Cuomo says these practices are widespread, but David Canaski has his doubts. He heads New York State Financial Aid Administrators Association.
DAVID CANASKI: If you were promoting inferior products to them at higher rates for your own benefit that would be kind of a silly way to engender loyalty in your alumni.
He says while there may be some rogue schools, most strive to give students a breadth of loan choices.
In New York, I’m Ashley Milne-Tyte for Marketplace.
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