The New York Times reported on August 23 that the College Board–the home of the SAT–has decided to leave the student loan business in the wake of crackdowns on shady practices in the industry. Here’s an excerpt:
In explaining its decision to abandon the business, the College Board cited new legislation and regulations cracking down on relationships between lenders and colleges that have been enacted in the wake of revelations that numerous lenders were paying colleges commissions or bonuses in exchange for business. College officials have also received free trips, meals and other perks to win spots on the so-called preferred lender lists that students rely on when selecting a loan company. …
The association also emphasized that its student lending operation had accounted for less than 1 percent of the $618 million in revenue in the year ending June 30, and that shutting it down would affect only 15 employees.
It’s a shame that access to higher education in this country has become so expensive that families have been duped by dodgy lending practices. Let’s hope that this scandal will help clean up the industry a bit. Let’s also hope that families will become better educated consumers, and that they will find the expertise they need to play the college admissions and financial aid game.