ATTORNEY GENERAL CUOMO EXPANDS COLLEGE LOAN INVESTIGATION TO DIRECT
WARNS STUDENTS ABOUT F RAUDULENT AND ILLEGAL BUSINESS PRACTICES
Student Loan Marketing Companie s Subpoenaed
New York, NY (October 11, 2007) - As part of an escalating investigation into direct marketing of college loans, New York
State Attorney General Andrew M. Cuomo served subpoenas and document requests on thirty-three companies and
lenders. The subpoenas seek information on the companies' use of misleading and deceptive tactics to entice young
borrowers seeking college loans.
Direct marketing companies, many of which appear to be marketing middlemen for lenders, use direct mail, phone calls,
television, radio and online advertising and personal contact to promote their loans. These companies directly target
unsuspecting students with inappropriate marketing incentives and promotions. Cuomo is investigating whether these
companies used deceptive offers, fraudulent solicitations or illegal incentives to lure students into applying for loans or loan
consolidations. Such practices may violate New York State's consumer protection laws and the anti-inducement provisions
of the federal Higher Education Act.
"The student loan industry is a very complex and confusing marketplace, and as students try to navigate its murky waters
to get the best loan at the best terms, the last thing they need are sharks baiting them with glossy promotions and
deceptive offers," said Attorney General Cuomo. "Students should be wary of such marketing and not allow it to deflect
them from careful consideration of the merits of a company's loan offering."
The Attorney General's Office issued the subpoenas following an investigation of various direct-to-student college loan
marketers, including EduCap/Loan-to-Learn, Affinity Direct/Educational Direct and three direct-to-consumer brands of First
Marblehead Corporation (Astrive Student Loans, Laurel Collegiate Student Loans and Monticello Student Loans).
"Our ongoing investigatio