Washington – New York Attorney General Andrew Cuomo announced Wednesday that two more student lenders have agreed to abide by a code of conduct designed to protect students from questionable college lending practices.
JP Morgan Chase and Bank of America, both leading student lenders, have agreed to adopt the code of conduct, Cuomo said at a hearing before the House Education and Labor Committee.
Cuomo said the code was needed to sever too-cozy ties between lenders and colleges or student financial-aid officers.
“We have to change the culture here,” Cuomo said. “There are relationships here which have to be changed and broken.”
The code of conduct bars lenders from paying colleges in exchange for being designated as preferred lenders. Cuomo said students almost always use lenders that appear on schools’ preferred-lender lists.
The code also bars lenders from paying for trips for financial-aid officers and other college officials. Lenders also cannot pay college employees to serve on advisory boards.
Sallie Mae, Citibank and more than a dozen universities previously agreed to adopt the code. But some lawmakers are pushing legislation to mandate such codes.
