Reston-based Sallie Mae will pay New York Attorney General Andrew Cuomo $2 million to end an investigation into college lending kickbacks, the company announced Wednesday.
Under the terms of the settlement, Sallie Mae also agreed to close call centers and any other staffing operations for college financial aid offices, cease payments to aid officers for work on company advisory boards and discontinue the practice of paying for financial aid officers’ travel.
“Sallie Mae engaged in activities that we believe were questionable under the law,” Cuomo said in Manhattan Wednesday. “We believe we could have litigated.”
The settlement results from Cuomo’s investigation into improper practices in the student loan industry.
Cuomo is exploring whether school officials steered students towards specific lenders in exchange for kickbacks.
“Sallie Mae has cooperated with this inquiry since its inception, and, as the industry leader, we have been confident throughout that our policies and procedures would stand tall,” the company said in a statement released Wednesday afternoon.
Since his investigation began last month, Cuomo has secured $3.3 million in reimbursement for students.
Bloomberg contributed to this report.
