Emerson College has agreed to pay the state nearly $776,000 to settle charges the school steered loan-seeking students to lenders that gave incentives to its financial aid staff.
Attorney General Martha Coakley said that Emerson cooperated in the investigation, which she said showed a pattern of lenders offering inducements to financial aid officers.
"At some stage, there's a conflict of interest," she said. "That's what we worry about, what creeps into this process that's not in the students' best interest."
Coakley would not discuss whether any other colleges are being investigated for allowing lenders to have undo influence, a situation that has been documented at schools nationwide.
Emerson spokesman Andrew Teideman said the college has changed its policies since the investigation. "Some of the changes we have made include the adoption of a strict code of conduct for our financial aid officers that prohibits them from receiving gratuities from outside entities," he said.
Under the settlement, 4,000 students who applied for loans at Emerson between 2004 and 2007 could be eligible for payments of between $50 and $839.
This program aired on July 21, 2009. The audio for this program is not available.