• Reuters , Wednesday, September 10, 2008 10:18 AM

The New York attorney general has reached settlements with several firms engaged in student lending and has called on the rest of the direct marketing industry to adopt the same standards. Last October, attorney general Andrew Cuomo's office issued subpoenas and requests to dozens of companies and lenders that make loans directly to students.

The new standards include a ban on the use of logos and return addresses that made it look like the lender's solicitation to consumers was from the federal government or the student's current lender. Firms may not mail fake checks or false rebate offers on current loans to entice students to take out loans, and they may not provide inducements such as gift cards, iPods, and GPS devices. They are also barred from advertising interest rates that are not available to the majority of borrowers who take out loans with the lender.

Seven companies also agreed to pay a total of $1.4 million into a fund "to educate and assist students and their families with respect to the financial aid process."

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