U.S. Officials Scrutinize Colleges' Deals With Lenders

Education Dept. may ban rewards to institutions for referrals to students

In December 2005, purchasing agents at Florida International University issued a request for proposals seeking banks and student-loan companies for a list of "preferred lenders" that the university planned to give to prospective borrowers.

The request alone was not unusual. Many colleges use competitive bidding to secure attractive terms and conditions for students and their parents.

What was

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