New York Attorney General Andrew Cuomo is probing alleged kickbacks paid to colleges or college officials by a half-dozen student loan companies.
The kickbacks allegedly were intended to have colleges place the companies on their lists of "preferred lenders" whose services are recommended.
Mr. Cuomo has filed notice to sue Education Finance Partners of San Francisco. Among many allegations: Cuomo says EFP gives Duquesne University in Pittsburgh 0.6 percent of the dollar amount of EFP loans taken out. That was $8,100 last semester.
Duquesne does not have preferred lenders. Its "alternative" lenders pay commissions that are put into the school's financial aid program. Duquesne says it has done nothing illegal and its practices are fair.
Well, perhaps. But the loan scandal involving at least 60 schools easily is a conflict of interest. Are students getting the best deals when schools have special relationships with lenders?
Other area schools say they do not receive kickbacks. Six schools, including the University of Pennsylvania -- which will reimburse students $1.6 million -- have settled with Cuomo's office.
On Wednesday SLM Corp. (Sallie Mae) agreed to a $2 million settlement, following in the footsteps of Citigroup Inc.
The halls of ivy should not seduce parents and students into blind trust. They must look out for themselves.
