Lasell College pays $191,000 to settle allegations it steered student loan applicants to gift-giving lender
The Boston Globe
September 3, 2010
Lasell College agreed to pay more than $191,000 to students to settle allegations it steered student loan applicants to Citizens Bank after the lender showered the school’s financial aid officers with free trips to sunny resorts and other gifts.
It was the second such settlement that Massachusetts Attorney General Martha Coakley has reached with a local college, part of a wave of actions by government agencies against schools across the country over their cozy relations with student loan lenders.
In Lasell’s case, Coakley accused the Newton private college of falsely telling students they were required to borrow from Citizens, even though other lenders offered cheaper loans. At the same time, Lasell employees secretly received free entertainment, meals, and other gifts between 2003 and 2007. For instance, Citizens allegedly paid for the director of Lasell’s financial aid office to take trips to Disney’s Yacht and Beach Club Resort in Florida and Sanctuary on Camelback Mountain in Arizona through her involvement with Citizens’ “Educational Finance Advisory Board.’’
Coakley said Lasell never disclosed the gifts to students or parents.
“Colleges and universities are in a unique position of trust and have a responsibility to provide lending advice that is in the best interest of students and untainted by conflicts of interest,’’ Coakley said. “Certainly, no school should ever attempt to restrict a student’s abilities to obtain more affordable loans.’’
In a court filing, Coakley’s office said lenders of similar loans, including the Massachusetts Education Finance Authority, offered better terms and repayment benefits than Citizens, but did not provide details.