Student loan lenders agree to adopt code of conduct
Posted by admin on September 15th, 2008
It was announced recently that 8 of the top student loan organizations would adopt a code of conduct when qualifying and funding college students for student loans.
Seven direct-to-student lenders, Nelnet Inc., Campus Door Inc., GMAC Bank, NextStudent Inc., Xanthus Financial Services Inc., EduCap Inc. and Graduate Loan Associates are donating an estimated $1.4mm to help educate students and their families on loan practices helping to eliminate the bait-and-switch tactics, higher-interest private loans and marketed products that appear to be federal loans.
The new code of conduct bans practices including:
* Using logos that make mailings appear to be from the federal government.
* Paying students to get their friends to take out loans.
* Offering prizes such as iPods and gift cards to induce students to take out loans with a particular lender.
* Advertising interest rates that are not available to a majority of borrowers.
We hope that these codes of conduct will be adopted across the board at all student loan providers and help college students and their parents understand and make good student loan decisions.
Tags: code of conduct for student loan, college student loans, loans, student loans
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