August 15, 2007Sallie Mae: preferred or not preferred in Miami?
It's getting tough to find a proper "preferred lenders" list this summer, as colleges feel the heat from state and federal investigations into student lending practices.
But old habits die hard.
On Monday, financial aid officials at the University of Miami said they'd abandoned the practice of recommending preferred lenders to students. On Tuesday they backpedaled in a report to Florida Attorney General Bill McCollum, after the Times pointed out instances in which they were still promoting lending giant Sallie Mae.
Sallie Mae handled some 92 percent of federal loans worth more than $69 million at the university in 2006, including University of Miami loans the company backed and later purchased. The company did even better at Nova Southeastern University that year; it issued $146.7 million loans in its own name, and had agreements to purchase $277 million more from the university or its "strategic lending partner," Fifth Third Bank.
The federal Department of Education has been trying to crack down on such domination by a single lender, proposing new rules and issuing warnings this summer to schools where one company dominates the action. But it missed many arrangements, such as those at Miami and Nova, in which loans are issued and quickly resold to another lender.
Got your own story on how Sallie, another big lender, or a university tried to convince you to take out a loan? The Gradebook would like to hear about it. Send a note to firstname.lastname@example.org