• Monday, November 9, 2009
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Cuomo Reported to Be Planning New Student-Loan Lawsuit and Agreements

After a silence of several months, New York’s attorney general, Andrew M. Cuomo, is putting a fresh public focus on the matter of student lending.

Mr. Cuomo’s office is preparing a lawsuit against one student-loan company, Goal Financial, and is nearing agreements with about a dozen other lenders concerning their marketing tactics, The New York Times reported today.

Goal Financial has been a leader in consolidations, the Times reported. Consolidations are the single large loans that borrowers seek after college to combine all the federally subsidized loans they accumulated as students.

Investigators found that Goal employed tactics that included gifts such as iPods for borrowers who applied for federal loans, incentives for students who persuaded their classmates to apply, and misleading advertising, the Times said, citing an unnamed “senior official” in Mr. Cuomo’s office.

Last year Mr. Cuomo described such improper behavior as widespread in the industry, persuading dozens of lenders and colleges to pay millions of dollars in settlement costs and to sign agreements to halt such practices.

The attorney general is close to agreement with “about a dozen” more loan companies over their marketing tactics, the unidentified official told the Times. Officials at both Goal Financial and Mr. Cuomo’s office did not return calls seeking comment. —Paul Basken

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