College Board settles state loan probes

December 23, 2008
NEW YORK - The College Board, the nonprofit best known for administering college-admissions tests, agreed to settle state investigations into its student loans.

The group will invest $675,000 to develop tools to help identify the loan options as part of the settlement.

The probe by the attorneys general of New York and Connecticut found the organization discounted products and services related to financial aid for colleges that agreed to place its loans on their lists of "preferred lenders."

The College Board stopped accepting loan applications in October 2007, citing new conflict-of-interest rules among lenders and school officials.

As part of yesterday's agreement, the organization said it would abide by the new rules if it started lending money again, the attorneys general said.

Twenty-two lenders and 26 colleges and universities have agreed with New York Attorney General Andrew Cuomo's office to cut financial ties and abide by a code of conduct that forbids acceptance of gifts or payments from lenders, said Emily Browne, a spokeswoman for Cuomo.

Source: http://www.boston.com/business/articles