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Written by: Michelle Cormier
Published: 11/06/2008 Goal Financial Loan Company Settles with Cuomo
Goal Financial, a major loan provider based in Alexandria, Virginia, reached a settlement agreement with New York attorney general Andrew Cuomo – who launched an inquiry in 2007 into the $85 billion student loan industry that uncovered evidence that colleges had been receiving payments from lenders seeking business from students. The company used deceptive tactics such as mailings made to look as though they came from the federal government and offered prizes such as iPods, spa gift cards and other items to attract borrowers. The settlement agreement stipulates that Goal Financial will pay $350,000 to the attorney general’s fund for educating students about the financial aid process and abide by a marketing code of conduct developed by Cuomo’s office. The code of conduct prohibits the use of deceptive tactics and offering gifts to lure potential clients and requires companies to provide timely information on loan terms and benefits to make it easier for students and parents to compare borrowing options. Eight other lenders (Nelnet, Inc., Campus Door, Inc., GMAC Bank, NextStudent, Inc., Xanthus Financial Services, Inc., EduCap, Inc., Graduate Loan Associates, L.L.C., and MRU Holdings, Inc.) have already agreed to adopt the code of conduct, and seven of those companies have contributed more than $1.4 million to the attorney general’s fund. “In these times of increasingly tight credit, it is crucial that students and their parents get solid, truthful information on which to base their loan decisions,” Cuomo said in regards to the settlement. The agreements with lenders, he continued, will ensure that “students and their families will be protected from misleading and deceptive student loan marketing practices.”
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