BY GABE NELSON
Daily News Editor
Published April 16, 2007
Up until recently, visitors to the Ross School of Business's financial aid website might have found information about student loans for international students on a page that said "Citibank is the preferred lender for Ross Business School Students."
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Sometime last week, that sentence disappeared. The rest of the page remained intact.
As an investigation by the office of New York Attorney General Andrew Cuomo continues to uncover corrupt practices in the ways colleges recommend loan companies to their students, at least two University units - including the Business School - have made changes to the wording of their financial aid literature and stopped calling the University's recommended loan companies "preferred lenders."
The website changes and a statement released on April 11 by the University News Service that said the University does not maintain preferred lender lists seem to indicate a desire by the University to distance itself from the wrongdoing Cuomo's investigation has uncovered at dozens of universities nationwide. The University has not yet been implicated in the investigation.
University spokeswoman Kelly Cunningham said financial aid offices independently decided to make the changes because of the negative connotations that have been attached to the term "preferred lender" by New York Attorney General Andrew Cuomo's investigation. She said she didn't know if any other University units made similar changes.
Cunningham said it's accurate to say that the University doesn't maintain preferred lender lists because that term now references the conflicts of interest Cuomo's investigation has uncovered.
Although the University was one of more than 400 colleges that received a letter earlier this year asking for information as part of the investigation, its financial aid office has not been found to be using illegal practices, Cunningham said.
"We're not doing anything wrong," Cunningham said. "We're not doing anything unethical or unlawful."
While some University of Michigan financial aid offices have tried to scrub their sites clean of references to preferred lenders, others have left the references untouched.
The University Law School's financial aid website listed five "recommended" lenders as of yesterday. The website of the financial aid office of the University of Michigan at Dearborn listed three loan companies under the heading "preferred lenders."
"To help our students, the Office of Financial Aid has established a preferred lender list," the website said. "While there are many attractive loan products with responsible lenders, the Office of Financial Aid has based its selections on our experience with lenders who offer attractive terms and have a history of good service."
The University of Michigan at Flint's financial aid website used to include a list of four preferred lenders on a fact sheet.
"The lenders on the back (of the page) will show you who the University of Michigan-Flint's preferred alternative loan lenders are," the site said until recently, according to a previous version obtained from a search engine. "The University of Michigan-Flint has partnered with these organizations to provide you with the most expedited processes possible."
The paragraph has since been reworded and the reference to preferred lenders was removed.
"The lenders on the back are a sample of alternative lenders currently utilized by some students at the University of Michigan-Flint," the page now says.
The changes to the page seem to indicate a hasty revision. The paragraph is now written in a font different from the ones used on the rest of the page. And because of a coding error, the original sentences remain embedded in the web page. If a visitor to the site tries to copy and paste the new sentence, it will copy the original one.
Cuomo's investigation has found that many universities have received kickbacks from loan companies for placing them on their preferred lender lists. It has also found that top financial aid officials at Columbia University, the University of Southern California and the University of Texas all owned unreported stock in a loan company that was on the colleges' preferred lender lists.
Matteo Fontana, a high-ranking official at the U.S. Department of Education, was found to have owned about $100,000 in stock in a loan company while working for the department.
Several college officials - including Ellen Frishberg, the director of student financial services at Johns Hopkins University - were found to have taken thousands of dollars in consulting fees from Student Loan Xpress, which is on Johns Hopkins's preferred lender list.























