College Financial Aid Industry Probed

School Loan Corruption Widespread

As a result of an investigation into the student loan industry this week, college employees will no longer be able benefit from loan providers, Yahoo News reported.

Yahoo said the SLM Corp., commonly known as Sallie Mae, also agreed to pay $2 million into a fund to educate students and parents about the financial aid industry, and it will adopt a code of conduct created by New York Attorney General Andrew Cuomo, who is heading the probe.

Sallie Mae operates student loan programs at more than 5,600 schools and has agreed to stop running call centers and providing additional staff for individual college financial aid offices. THe company will also stop paying financial aid officers who serve on advisory boards and will no longer fund trips for school officials, Yahoo reported.

Six colleges, including the University of Pennsylvania, New York University, Syracuse University, Fordham University, Long Island University and St. John's University, have agreed to reimburse students with a total of about $3.27 million for the inflated loan prices created by revenue sharing agreements