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OSWEGO, NY – Assistant Attorney General Carolyn Fast met with members of the Oswego Rotary Club on Tuesday as part of Attorney General Andrew M. Cuomo’s groundbreaking statewide educational initiative alerting families to pitfalls and new protections regarding the student loan industry.
The event was part of Attorney General Cuomo’s Community Partnership Initiative where he brought his entire executive team to the North Country to meet with local officials and groups and hold a community-wide forum. This initiative is designed to make the office more responsive to the needs of New York’s communities.
Fast briefed members about Attorney General Cuomo’s Student Bill of Rights; the first of its kind in the nation.
The bill of rights is part of a new state law resulting from the Attorney General’s ongoing investigation of the $85 billion per year college loan industry, providing new rights and protections to safeguard students and families from deceptive practices.
For many, a college loan is the second biggest loan expenditure they will take on, second only to a mortgage.
“The Student Bill of Rights is an indispensable resource for families who rely on loans to pay for college,†said Attorney General Cuomo. “It provides critical tools to protect families from the predatory lending activities that our investigation has uncovered. I encourage every student and their family to take advantage of the Student Bill of Rights, because wise decisions they make now will make a difference for years to come.â€ÂÂ
“As students head to college, they should have the knowledge to choose the loan that is best for them,†said Assistant Attorney General Fast. “Our ongoing investigation has uncovered many unethical and illegal practices perpetrated by student loan companies, but we cannot stop at simply exposing problems within the industry – Educating the public is crucial. This is why we are meeting with families in Oswego and across New York State to make certain that all students know the law now protects their right to invest in their future without
fear.â€ÂÂ
The Student Lending Accountability, Transparency and Enforcement (SLATE) Act of 2007 unanimously passed both houses of the New York State Legislature and was signed into New York State law.
Fast distributed the Student Bill of Rights and Smart Tip sheets – including the top-ten questions to ask schools and lenders – at today’s event.
The Student Bill of Rights codifies Attorney General Cuomo’s College Loan Code of Conduct, the basis for settlements with lenders and schools across the country. Congressional leaders have also endorsed SLATE as a national model. The bill gives students and families the right to choose a lender, even if the lender is not included on the school’s preferred lender lists.
Additionally, the law grants the following rights:
To get unbiased advice about loans and lenders from schools’ financial aid offices
To get the criteria a school uses to select preferred lenders
To know whether preferred lenders are paying the school or financial aid officers
To know what benefits or rate discounts lenders offer, and whether those benefits or discounts will be made immediately available, or only after a certain number of consecutive timely payments
To know if a lender has agreed to sell its loans to another lender
To know whether borrower benefits and discounts will continue if the loan is sold
To know the interest rate for the loan before borrowing
To exhaust federal borrowing options before turning to higher cost private loans.
Fast highlighted some of the worst practices identified during the Attorney General’s nationwide investigation into the student loan industry, including the illegal steering of students to preferred lenders by specific schools, revenue sharing agreements between schools and lenders, university financial aid call centers staffed by lender employees, gifts and trips from lenders to schools’ financial aid directors, and even stock in lender companies directly given to financial aid officers.
The average annual cost of a four-year private college is approximately $30,367 and about $13,000 at public institutions. Nearly 3 out of 5 New York undergraduates across New York State take out loans to pay for college education.
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