By Joyce Kryszak
Cheektowaga, NY – New York State Attorney General Andrew Cuomo was in Cheektowaga Thursday to kick-off a campaign educating students about deceptive student loan practices.
Seniors at Cleveland Hill High School learned a little Latin from the Attorney General Thursday. Before taking out student loans, Cuomo said graduates need to know one phrase very well - "Caveat Emptor" - buyer beware.
There is good reason for his warning.
Cuomo's ongoing investigation into the student loan scandal has already uncovered millions of dollars in fraudulent lending practices. So far, eight colleges have agreed to settlements with the state for steering students to preferred lenders in exchange for kickbacks.
In some cases, he said students paid about $500 in hidden commissions. But Cuomo said the total cost could be staggering. He said colleges weren't shopping for the best rates that could have saved students thousands of dollars over the lifetime of their loans.
But a new law passed unanimously earlier this month by the state legislature hopes to prevent other college-bound students from falling prey to costly choices.
The "Student Bill of Rights" mandates that colleges provide transparent, unbiased information to students about their loan options.
Seniors will receive a card detailing their rights, with questions to ask when seeking a loan.
Cleveland-Hill senior Nicole Habermehl thinks the information will be very helpful. She said even beginning the process was confusing.
The new law should also be helpful for high school officials who try to offer loan guidance to students. Bruce Inglis is Superintendent for the Cleve-Hill Schools. Inglis is pleased that the scandal was brought to light, alerting school officials to a problem he said was, until now, "masked."
But Inglis believes an even wider educational campaign is needed, including high school officials and parents, as well as students.
Legislation is pending in Congress that would use New York's law as a national model to prevent loan fraud. Students and parents can find out more information about the student loan scandal and the new student bill of rights for New York residents by going to the state attorney general's web site at www.oag.state.ny.us.
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