But the sky isn't really falling......

Ok, yeah, the college/university sponsored preferred lender list probably isn't such a wonderful tool: it limits competition, seriously interrupts the flow of information and consumer decision making, and gets under the skin of Andrew Cuomo. [See this article about Education Finance Partners.] But what seems to be really eating at Cuomo are these "kickbacks" that schools get for putting a lender on the list.

They aren't really "kickbacks" as much as they are revenue sharing models; "if I do well, you do well." We call that capitalism. And to make matters worse, the financial aid officers aren't personally profiting from these revenue sharing arrangements. It seems that any revenue from the lending partners are plowed right back into the university's scholarship fund, building fund, endowment, etc. Nothing wrong with that.

Now, there are some isolated instances where EduCap is renting out the Four Season's at Nevis for an all expense paid "conference", but it's just that....and isolated instance. And sure, all those involved should face consequences.

But we have a solution to the problem: do away with the preferred lender list. There, problem solved. But continue to allow the college/university to collect the revenue sharing fees. And the student lending industry should stand up and fight Andrew Cuomo and Sen. Kennedy with the 6 ounce gloves on this one.