Washington — More details are emerging about the renewed campaign by New York State’s attorney general, Andrew M. Cuomo, to investigate financial conflicts of interest on college campuses.
In an annual regulatory filing, Sallie Mae, the nation’s largest student-loan company, said Mr. Cuomo had sent it a subpoena, dated February 11, seeking “documents and information relating to our direct-to-consumer Tuition Answer product.”
Sallie Mae said it began offering Tuition Answer loans in 2004, marketing them to students and their families through “targeted direct-mail campaigns and Web-based initiatives.” Students and parents can borrow up to $40,000 per year for college expenses through the program, which had $3.3-billion in outstanding loans as of December 31, Sallie Mae said.
The company announced recently that it was putting a greater emphasis on private loan offerings, like Tuition Answer, following cuts by Congress in subsidies for lenders in the government’s program of federally guaranteed loans. Sallie Mae said in its regulatory filing that it planned to cooperate with Mr. Cuomo’s investigation, without describing what the attorney general was seeking.
A spokesman for Mr. Cuomo said today that the attorney general was investigating whether colleges were taking fees from vendors in exchange for the rights to sell textbooks, snacks, and financial services on campuses. The spokesman, Jeffrey Lerner, told the Associated Press that students might not be getting full value for their money if their colleges chose vendors on the basis of how much money the companies were willing to pay to do business. No subpoenas have been issued in that investigation, Mr. Lerner said.
Benjamin M. Lawsky, a deputy counsel to the attorney general, told Newsday earlier in the week that Mr. Cuomo was broadening his series of investigations into financial improprieties on college campuses. Institutions including Dartmouth College also received subpoenas this month from Mr. Cuomo, asking about contracts with banks for college-branded credit cards. —Paul Basken
