Public colleges and universities under fire for promoting controversial education loans (subscription)
Public colleges and universities are facing criticism from consumer advocates for advertising high-cost private loans to students in nondegree programs.
A report by the Student Borrower Protection Center (SBPC) accuses schools, such as Virginia Tech and Indiana University, of promoting specialty finance companies that can charge double-digit interest for loans with opaque terms. The advocacy group, founded by former Consumer Financial Protection Bureau official Seth Frotman, says colleges could be violating federal rules by failing to disclose arrangements with the lenders.
“Across the country, public colleges saw the scam predatory for-profit schools ran a decade ago and decided they wanted in on the action — regulators must bring these abuses to an end,” Frotman said.
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