WASHINGTON (AP) - New York's attorney general criticized college financial aid officials Saturday for proposing a code of conduct he said fails to curb abuses in the student loan industry his office has uncovered.
Andrew Cuomo, whose office has investigated the industry for months, made his views known in a letter to the group that represents aid officers.
'The code you have proposed is inadequate in that it does no more than recite vague, lofty goals of generalized ethical behavior,' Cuomo wrote Dallas Martin, president of the National Association of Student Financial Aid Administrators.
A lawyer for the association said the group had sent Cuomo's office a revised proposal. But a Cuomo spokesman said the office had not received an updated code.
Cuomo's letter, obtained by The Associated Press, says the association should adopt the code of conduct he has developed and two dozen universities and six student loan companies have agreed to follow.
The House passed legislation this month that requires schools to develop rules similar to Cuomo's plan.
His code bans colleges from receiving anything of value from a student loan company in exchange for an advantage sought by that company. That includes a ban on trips for financial aid officers paid for by lenders. Student loan officers also cannot accept anything of value for serving on a lender's advisory board.
In a draft proposal, the association said loan officers should not be allowed gifts but it was OK to accept 'reimbursement of actual and reasonable expenses' for serving on advisory boards or for participating in a training activity sponsored by the industry, according to documents obtained by the AP.
Cuomo, in his letter to the group, said that was a major problem.
But association lawyer Sheldon Steinbach said in an interview Saturday the group has changed its position. A revised proposal sent to Cuomo's office in recent days makes clear that financial aid officers could not get reimbursed by loan companies, he said.
'The initial draft indeed sought to preserve an element of the status quo, but that has completely been struck from the second draft that was forwarded,' Steinbach said.
Cuomo spokesman Jeffrey Lerner said the attorney general's office has yet to receive any revisions. 'We hope NASFAA will join the growing movement of lenders, schools and legislatures who are committing to our code of conduct,' he said.
The association's draft says a loan officer never should take any action that he believes unlawful. It also says officers should ensure that the information they provide to students is accurate and unbiased.
Cuomo said those kind of suggestions are so vague as to be meaningless.
Steinbach said more changes are coming and a new draft of its proposed code could be finished this week.
The code developed by Cuomo sets out specific rules about the development and use of preferred lender lists, in which schools recommend certain loan companies to students. The trade group's proposed code is silent on such lists.
Steinbach said colleges -- specifically the chief financial officer of a school -- should set those guidelines.
'We fully anticipate that the document that emerges will be in compliance with the letter and spirit of what the attorney general has asked,' he said.
Cuomo's investigation has led to the recent firing of the financial aid director at the University of Texas after for allegedly owning stock in a loan company in violation of university rules.
It also has led to investigations into student loan officials at: Columbia University in New York; the University of Southern California; Johns Hopkins University in Baltimore; Widener University in Pennsylvania and Capella University, a Minneapolis-based online school.
An Education Department officials has been placed on leave pending an investigation into his ownership of stock in a student loan company.
Student loan companies have served as key sponsors of Martin's trade group, helping pay for conferences and sponsoring Web pages, for example.
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