New York Attorney General Andrew Cuomo said Monday that his office has reached a settlement with 35 colleges and universities to reimburse students $3.27 million after a probe into what he claimed were questionable financial arrangements between schools and lenders.
Mr. Cuomo said at a press conference that the schools will reimburse students money paid by lenders in revenue-sharing agreements and adopt a code of conduct. Citigroup Inc.'s Citibank Student Loan Corp. has agreed to adopt the code of conduct voluntarily and to commit $2 million to a new fund administered by the Attorney General's Office to inform college-bound students and their parents about the student loan industry.
The code of conduct prohibits revenue sharing between lenders and schools, prohibits college staff members from accepting anything of more than nominal value, and includes disclosure standards and restrictions on how preferred lenders are chosen.
