College grads, you get the calls at night, at home. Earnest students at your alma mater, saying what a great experience they’re having in college- didn’t you like it, too?- and they’re asking for your help in seeing that others benefit in the same way.
Don’t take this as a reason not to donate, but you may have already helped your old school more than you realize. Many colleges have been taking what some unkindly refer to as “kickbacks” from the companies that wrote your student loans.
Citibank pays Syracuse University a small percentage of the volume of private loans — those that are not guaranteed by the federal government — taken out by its students, according to state officials. Kevin Morrow, a spokesman for Syracuse, said in a statement, that the university was not prepared to respond in detail at this time. He added, “Students are not required to use any of the recommended lenders for their student loans.”
A spokesman for Citibank said the company would not comment.
If all this gives you, as a student or a parent, that “uh-oh” feeling, beware financial aid people presenting you with a list of the college’s “recommended” or “preferred” lenders. One of them could have the best deal, but it’s very likely that some of them are giving the school a cut of your loan payments.
Now-Governor Eliot Spitzer began this investigation as New York State Attorney General; successor Andrew Cuomo is carrying it on. It’ll be interesting to see how soon we get fuller explanations from lenders and colleges, including answers to allegations that some schools’ financial aid officers enjoyed free trips and other perks for making these deals.