Author Topic: NASFAA/NACAC members implicated in Student-loan fraud  (Read 2798 times)

Scholarship Bob

NASFAA/NACAC members implicated in Student-loan fraud
« on: September 03, 2011, 05:11:40 PM »
This post concerns the ongoing investigation by the Attorney General of New York concerning the nefarious relationship between various members of the National Association of Student Financial Aid Administrators (a/k/a/ NASFAA), and the certain members of an alphabet-related group called the National Association for College Admission Counseling (a/k/a/ NACAC).
 Both of these groups are registered non-profit organizations, yet are highly dependent upon the annual membership fees from colleges, universities, admissions' officers, financial-aid officers, and advertising revenue from deep-pocketed student-loan companies. It is the members of these groups that are the focus of pending student-loan fraud investigations.


Attorney General Andrew Cuomo appears to be  investigating allegations of possible kickbacks to various school officials for steering students to certain lenders. His investigators say they have found numerous arrangements that benefited schools and lenders that were members of NACAC/NASFAA at the expense of students.
Besides schools, universities and private loan companies connected to NASFA/NACAC, even officials at the U.S. Department of Education have had their hand in the cookie jar.  Matteo Fontana, a U.S. Department of Education official who oversaw the student loan industry, was put on leave after it was reported that she owned at least $100,000 worth of stock in Education Lending Group Inc. a company being investigated in the student-loan probe.
NAAS Admin

Scholarship Bob

Re: NASFAA/NACAC members implicated in Student-loan fraud
« Reply #1 on: September 03, 2011, 05:19:16 PM »
The apparent student-loan scheme concerned secretive commissions or stock options, and/or under-the-table payments made to various financial-aid administrators, and student loan officers, and, in some cases, U.S. Dept. of Education employees. These kickbacks were aimed at influential persons connected to member institutions of NACAC and/or NASFAA for the apparent purpose of steering or baiting students to use specific or certain student loan companies. Student-loan companies that were not members of NACAC or NASFAA, and who were outsiders, were not recommended to the students. The #34preferred" student loan companines would either be a source for an original loan or as source to consolidate an existing student loan.
Either way, neither students or parents were told of the illicit arrangements.
Ultimately, instead of being presented with competitive options and the best service, corrupt and unethical persons employed at member institutions of NASFAA and/or NACAC simply pocketed thousands of dollars in secretive commissions or under-the-table payments. The costs of this practice impacted both students and their parents financially. Instead of paying these outrageous fees to greedy persons at universities and colleges, the student-loan companies could have simply lowered the costs of these loans to students.
NAAS Admin

Scholarship Bob

Re: NASFAA/NACAC members implicated in Student-loan fraud
« Reply #2 on: September 03, 2011, 05:20:03 PM »
 New York-based criminal investigators found that many colleges have established "preferred lender" lists and entered into revenue sharing and other financial arrangements with those lenders. Some colleges have "exclusive" preferred lender agreements with the companies.

At least three local colleges in New York, namely, Long Island University, Dowling College and the New York Institute of Technology, are part of the criminal probe. Many of the persons under suspicion are either members of NASFAA and/or NACAC, or are somehow associated with these groups, either directly or indirectly.
NAAS Admin