Senate panel alleges student lender abuses

A Senate panel on Thursday issued a report making new allegations of misconduct by student-aid lenders and colleges, while Johns Hopkins University separately agreed to pay $1.125 million to settle an investigation of its student-loan practices.

"The problem is systemic and cannot be isolated to a few 'problem' schools," it concluded.

In one example, committee investigators cited a violation "involving cash payments by Texas Tech University."

A March 29, 2005 letter from Texas Tech told some lenders they had been chosen for its 2005-2006 academic-year list of preferred lenders, the report said. The letter said lenders "will have the opportunity to purchase space as a preferred lender on the TTU Financial Aid website" for $500.

Read the rest of the story at Reuters