April 13, 2007

Investigation of Lenders' Ties to Colleges Expands

3 student-aid officers and a key federal official owned stock in loan firms

By PAUL BASKEN and KELLY FIELD

Five months after his office waded into a $90-billion relationship that federal officials are still debating how to handle, New York State's attorney general, Andrew M. Cuomo, is drawing blood in his effort to change the way colleges do business with the banks that lend to their students.

At least 35 colleges and one lender have accepted Mr. Cuomo's demands that they pay some restitution to students and accept a new code of conduct. At least two other state attorneys general are

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