Dozens of colleges, universities and trade schools have been ordered to turn over documents to government officials explaining why a single lender at each school handles the majority of federally backed student loans.
The request, sent to 55 schools, comes amid concerns that some colleges might be steering students improperly to lenders who reward schools for the extra business. The schools have until Friday to give federal education officials documents dating to July 1, 2005, that include correspondence with lenders, loan policies and written descriptions of how preferred lenders were chosen.
The targeted schools include large public universities, private liberal arts colleges and career schools where students received at least $10 million in federal loans for tuition and fees during the 2006-07 school year, according to data obtained from the U.S. Department of Education by Gannett News Service under the Freedom of Information Act.