GW officials are taking a closer look at the Office of Financial Aid in response to a nationwide scandal involving lenders’ relationships with universities.

The student loan industry, which lends students about $85 billion per year, came under scrutiny in early February when New York Attorney General Andrew Cuomo began investigating possible corrupt relationships between the companies and schools. Cuomo was especially concerned with kickbacks – deals where lenders give school officials money, stock or other benefits in return for steering students toward their companies, according to a Washington Post article.

Cuomo warned that these dishonest incentives sometimes cause schools to work exclusively with lending companies that don’t offer the best terms and rates for students.

An internal investigation of GW’s own student loan department was conducted in March as soon as the issue gained national attention, said Tracy Schario, director of Media Relations.

“The preliminary review found we are in compliance with all applicable law,” Schario said. “The fact that we did our review in March is a good sign, especially since we did not discover any red flags.”

Schario said GW safeguards against fraud through protective measures by monitoring revenue sharing and finder’s fees – two practices that Cuomo said corrupts the student loan process.

“The one thing you can say about GW as a whole is that we try to be continuously aware of things of this nature,” Schario said.

Following an investigation earlier this month, New York University, Syracuse University, St. John’s College, Fordham University and the University of Pennsylvania were all found to have received valuable rewards for pushing certain lenders, The New York Times reported.

The two largest lenders, Sallie Mae and Citibank, have agreed to no longer pay travel and entertainment expenses to college financial aid officials.

Six colleges and universities have suspended or fired their financial aid directors since the investigation began.

John Hopkins University suspended its financial aid director after discovering she received approximately $65,000 in consulting fees and $1,200 in travel expenses from Student Loan Xpress Inc., a company highlighted in Cuomo’s initial investigation.

Each college or university has a different process for choosing which lenders are listed as “preferred.” Schario said GW’s own selection process is slightly less strict than neighboring schools.

“I don’t want to say it’s a loose process, but it’s definitely informal,” she said.

Preferred lenders for GW are approved only after Daniel Small, director of Student Financial Assistance, confers with other administrators. The deciding factors, Schario said, include customer service, competitive rates and up-to-date technology.

“It’s still a student choice,” Schario said. “Students can choose from the preferred lenders, the other lenders we list, or even the lenders we don’t list.”

Some students said their families did not take the time to look around and compare loan terms, choosing instead to go with the preferred lender for ease and convenience.

“I remember choosing a lender was a really fast process, and we didn’t do any extensive research,” freshman Emma Martin said. “I definitely think students and parents probably just choose a preferred lender instead of spending the time to find out for themselves what the best choice is.”