Reuters via CNN:
The New Jersey attorney general said Friday he issued civil subpoenas to 61 colleges, 17 student loan firms and a state authority seeking information on potential misconduct in the student loan market, a target of widening investigations nationwide.
Attorney General Stuart Rabner said he is looking into “allegations that lenders have made improper payments to have colleges promote specific loan companies to students.”
New York (led by Andrew Cuomo) and federal investigations are ongoing. The Star-Ledger adds:
Officials from several schools told The Star-Ledger they were pressed by the agency, the New Jersey Higher Education Student Assistance Authority (HESAA), to make Sallie Mae their preferred lender.
My comments: First, it seems that regulations were unclear, though I must say this seems like an excuse rather than reality. Second, when big money is involved — whether in colleges, business, government, charities, car dealerships, or anything else — corruption is a real danger. Overall, this seems to developing into a big story, and it’s not the first student loan scandal.