Cuomo: States Will Pursue Student Loan Fiasco New York Attorney General Andrew Cuomo told lawmakers that if the federal government doesn't step in to regulate the student loan industry, the states will. Cuomo has persuaded 4 major lenders and 16 colleges and universities to sign a code-of-conduct pact.
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Cuomo: States Will Pursue Student Loan Fiasco

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Cuomo: States Will Pursue Student Loan Fiasco

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Cuomo: States Will Pursue Student Loan Fiasco

Cuomo: States Will Pursue Student Loan Fiasco

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New York Attorney General Andrew Cuomo told lawmakers that if the federal government doesn't step in to regulate the student loan industry, the states will. Cuomo has persuaded 4 major lenders and 16 colleges and universities to sign a code-of-conduct pact.

ROBERT SIEGEL, Host:

NPR's Libby Lewis has that story.

LIBBY LEWIS: Cuomo called the problems, he has found in the student loan industry, an American crisis. He said that 90 percent of college students follow their school's recommendation about which lender to borrow money from for their education.

ANDREW CUOMO: Why? Because these schools suggest these lenders to students and students have trust in the schools.

LEWIS: But he said many of the schools choose those lenders based on what the lenders give the schools, not on what they can offer the students. He said when that happens...

CUOMO: The school violates that relationship of trust.

LEWIS: This week, Education Secretary Margaret Spellings said she would form a task force to recommend rules to oversee the industry. But Cuomo told lawmakers it's too late for a task force.

CUOMO: Today, the marketplace is ahead of the regulators. Lenders and schools are reforming practices and the Department of Education has still not acted.

LEWIS: Democrat George Miller, who chaired today's meeting, said he agreed.

GEORGE MILLER: I don't understand their slowness to react to this situation.

LEWIS: Cuomo said the federal government is the right place to make the changes needed to set things right.

CUOMO: I believe in the states as laboratories of democracy. And I believe in the free market system to correct itself when the consumer is informed. But I also believe that federal action is the swiftest, most comprehensive resolution to a nationwide injustice.

LEWIS: Libby Lewis, NPR News, Washington.

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