ALBANY, N.Y. (AP) – New York Gov. Andrew Cuomo plans to establish a watchdog group to protect students from predatory lenders.
The so-called Student Protection Unit, expected to be detailed in the governor’s budget proposal Tuesday, would keep an eye on student loan companies and other financial firms.
An administration official, who wasn’t authorized to detail plans in advance and declined to be identified, says it will be dedicated solely to protect New York students from being ripped off.
It’s expected to issue subpoenas to 13 student debt relief companies Tuesday about potentially misleading ads and improperly charging fees to enroll in programs available free from the federal government.
The new unit in the state Department of Financial Services is expected to have a half-dozen lawyers and investigators to start. The agency will take complaints.
Federal Reserve Bank of New York data show student debt nationwide has quadrupled in the past decade, reaching about $1 trillion, and New York’s average student debt per borrower is $27,310 or third highest of any state, according to administration officials.