Support widens for student loan probe

NEW YORK —  New York’s investigation into student-lending practices may gain broader, nationwide support after officials from 40 states joined in a conference call Tuesday to address the widening scandal.

More than 100 representatives participated in a call hosted by the National Assn. of Attorneys General.

The states agreed to work together as New York’s probe into conflicts of interest and deceptive practices in student lending expanded to include about 100 schools and roughly 20 lenders.

“The discussion focused on the importance of cooperation and the continuing need to coordinate as these investigations continue,” said Angelita Plemmer, a spokeswoman for the association.

The New York attorney general’s office, which announced its investigation of lenders and schools in February, said it had been working closely with California, Illinois, Massachusetts, Missouri and Rhode Island.

New York has been examining financial arrangements between student lenders and about 100 colleges and universities. New York Atty. Gen. Andrew Cuomo said lenders offered payments, shares and a variety of perks to schools and school officials to secure a place on preferred-lender lists so that they could win more business.

Cuomo sent subpoenas and information requests to 13 more lenders Friday, expanding the probe to include the top 20 student lenders, which command 80% of the business.

In the last two weeks, Cuomo has reached settlements with Citigroup, Sallie Mae and Education Finance Partners. The state has collected from the student lenders $6.5 million in payments, which is to be used to help educate students about their financial-aid options.