A Subpoena for Sallie Mae
Last year, New York State Attorney General Andrew Cuomo initiated an avalanche of reforms with his investigation of the relationships between college financial aid officers and the companies they recommend to students as preferred lenders. Now it seems Cuomo has set his sights on Sallie Mae, the country's largest provider of student loans. Late last month, he subpoenaed Sallie Mae for information regarding its Tuition Answer service, the private loan program the company provides to students. Private loans such as these are used to fill the students' need once they've reached the maximum for government loans and don't have the same low-interest rates.
Neither the attorney general's office nor Sallie Mae would comment on the investigation, though the loan giant has said it is cooperating fully. Sallie Mae recently has said that it would be tightening its lending practices, placing more consideration on borrowers' credit histories and the graduation rates of the schools they attend, in part because of the crisis in other areas of lending.
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