NEW YORK -Eight student loan companies agreed to adopt a code of conduct that bans deceptive marketing practices — such as offering prizes to students who sign up for loans — following an investigation by the state of New York, the state attorney general said Tuesday.
Seven direct-to-student lenders agreed to pay a combined $1.4 million to settle the probe, Attorney General Andrew Cuomo said. These companies employed bait-and-switch tactics, pushed higher-interest private loans and marketed products so they appeared to be federal loans, he said.



The new code of conduct bans practices including:
_Using logos that make mailings appear to be from the federal government
_Paying students to get their friends to take out loans
_Offering prizes such as iPods, gift cards and GPS devices to induce students to take out loans with a particular lender
_Advertising interest rates that are not available to a majority of borrowers