Student Loan Student Loan ScandalsScandals

Student Loan Student Loan ScandalsScandals

Group 1Group 1

• According to According to The The New York Times, New York Times, the the student loan student loan industry is roughly industry is roughly at about $85 billion. at about $85 billion.

• Student loans Student loans cannot be forgiven cannot be forgiven on the basis of on the basis of bankruptcy bankruptcy

The CaseThe Case

• Recently, there has been an scandal plaguing the student loan industry—Private loan companies have been providing “kickbacks” to become preferred lenders

In some cases, investigators said, lenders provided all-expense-paid trips for college financial aid officers to exotic locations. –USA TODAY

• New York Attorney General Andrew Cuomo leads charge

• 29 companies have been subpoenaed for investigation

• Schools involved include Manhattan College, City College, Iona College and the State University of New York colleges at Buffalo, Cortland, Fredonia and Upstate Medical Center.

Cuomo is asking whether the alumni groups that endorsed loan consolidation companies received any benefit or payments from lenders.

Catholic Social TeachingCatholic Social Teaching

Human Dignity - The primary goal of Human Dignity - The primary goal of any business enterprise should be any business enterprise should be the well-being of the human person the well-being of the human person (or student!)(or student!)

Catholic Social TeachingCatholic Social Teaching

Community and the Common Good - Community and the Common Good - We have a moral obligation to build a We have a moral obligation to build a society that provides the greatest society that provides the greatest opportunity for benefit for the greatest opportunity for benefit for the greatest number of people possible number of people possible

What Now?

• Cuomo has been investigating practices in the $85 billion student loan industry since January 2007. At least 12 lenders and 26 schools have agreed this year with his office to abide by a new code of conduct governing student lending.