3 colleges agree to rules on lenders
Three colleges agreed Monday to change how they recommend lenders on campus, and one of them will reimburse students $88,000 to settle a probe into the student loan industry.
Washington University in St. Louis; Oakbrook Terrace, Ill.-based DeVry University; and Career Education Corp. agreed to a code of conduct to protect students from kickbacks paid to colleges by lenders in exchange for steering students their way.
Career Education Corp., a for-profit college based in Hoffman Estates, Ill., with campuses in Illinois and New York state, agreed to pay $21,000 into a government fund that helps educate parents and students about college loans, said New York Atty. Gen. Andrew Cuomo, who led a probe into loan arrangements.
Washington University ended a revenue-sharing agreement with Education Finance Partners of California in 2006 that would have provided revenue for the university if it led more students to the company, Missouri Atty. Gen. Jay Nixon said.
The university denied that it violated state law and said that it had never received payments.
DeVry ended a similar agreement in 2005 after one year and will pay $88,000 to students at its campuses nationwide who borrowed money during that time from Citibank, which has agreed to a $2-million settlement with Cuomo.
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