About 'no interest student loan'|Father Stuck With Dead Son’s Student Loans But No One Will Tell Him How Much He Owes
New York State Attorney General Andrew Cuomo announced Thursday that his office will sue Drexel University in Pennsylvania, which will be the first legal action against a school in his nationwide student loan investigation. According to Cuomo's investigation, Drexel received over $124,000 from revenue sharing agreements with Education Finance Partners (EFP) and has accrued another $126,000 through March 2007. Since 2005, Drexel has sent over $16 million in loan volume to EFP as part of its' preferred lender list. In landmark settlements with other schools involved in the student loan scandal, students will be reimbursed $3.27 million. Under the settlements, the following schools will make aggregate reimbursements: NYU - $1,394,563.75 for loans issued over a five-year period. St. John's University - $80,553.00 for loans issued over a one-year period Syracuse University - $164,084.74 for loans issued over a two-year period Fordham University - $13,840.00 for loans issued over a one-year period University of Pennsylvania - $1,617,580.00 for loans issued over a two-year period Long Island University - $2,435.41 for loans issued over a one-year period The money will be distributed to students based on how much each student borrowed and at what rate. If students cannot be contacted, the money for their reimbursement will go to a fund set up by Cuomo's office to educate college-bound students about the student lending industry. In the same settlement, Citibank agreed to contribute $2 million to the educate-students fund for its' part in not complying with the lender code of conduct. Cuomo says, "This investigation is a two front battle: lenders and schools. We have proceeded against lenders and now we are proceeding against schools. There is no reason for a school not to adopt the Code of Conduct," Cuomo said. "This office has been clear to schools: settle or we will commence litigation. Either way we will get justice for students." Cuomo also applauds the schools and Citibank who have settled in favor of students. "These schools and Citibank have made the responsible choice and are showing themselves to be industry leaders by being the first to take a major step in cleaning up a system laden with conflicts of interest," Cuomo said. "We are beginning the process of restoring trust between universities and students and now is the time for other schools and lenders to step up and end the conflicts, perks and revenue sharing that have been costing students in New York and across the country dearly. These schools and Citibank are setting the example the entire industry should live by." Edward Kennedy has asked the U.S. Department of Education to investigate Federal Family Education Loan Processing Corporation and FSLS, Incorporated, both that offer deals to students that might violate federal law. Kennedy discovered that one company offers a credit card with a limit of $300 in exchange for a testimonial by the student that the company provided good federal student loan services. Neither company is affiliated with the federal government, and Federal Family, who markets itself as FFELP, Inc., may be misleading consumers into thinking it was created under the 1965 Higher Education Act, which it was not. Stay tuned; it is likely that more settlements will be announced and more refunds to students may be awarded as the ongoing national investigation into student loan misconduct proceeds. |
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