San Francisco student loan company suspected of kickback scheme to school officials

By Emmett Berg

A San Francisco lending firm is under pressure to disclose any financial relationships with California colleges and universities as part of a growing scandal involving student loan companies and alleged kickbacks to education officials.

State Attorney General Jerry Brown on Tuesday demanded records detailing any financial relationships between San Francisco-based Education Finance Partners and public or private universities in the state.

Brown also called for San Diego-based Student Loan Xpress Inc. to produce documentation.

“Schools and universities must be beyond reproach, and no further burdens should be visited upon students who are already weighted down by escalating student-debt responsibilities,” Brown said in a statement.

A day earlier, Education Finance Partners agreed to pay $2.5 million to settle a complaint by the State of New York after a wide-ranging investigation into kickbacks that helped lenders get placement atop preferred lending lists given to students.

No one from Education Finance Partners was immediately available for comment.

A spokesman for the California Faculty Association, which represents faculty at California State University campuses, said the details unfolding so far were the “tip of the iceberg.”

President John Travis said the association he leads “was grateful for the attorney general’s efforts to uncover any inappropriate or usurious financial aid practices that involve California’s public universities.”

Bay City News

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