Johns Hopkins University has agreed to pay $1.125 million to settle a probe of its student loan practices, the New York attorney general said Thursday.

The settlement is the latest in a nationwide probe of conflicts of interest in the $85 billion student loan industry. Twenty-six schools and seven lenders, including Sallie Mae , JPMorgan Chase and Bank of America , have reached agreements with New York Attorney General Andrew Cuomo.

The latest agreement resulted from Cuomo’s findings that Ellen Frishberg, the director of student financial services at Johns Hopkins, was improperly promoting a lender, Student Loan Xpress, after the company paid her more than $65,000 in consulting fees and other payments, the AG’s office said. Student Loan Xpress is now a unit of CIT Group Inc.

A lawyer for Frishberg could not be reached immediately for comment.

In a statement, Johns Hopkins said the payments by Student Loan Xpress, made from 2002 to 2006, had not been disclosed to it, which was a violation of its conflict-of-interest policies.

Johns Hopkins said that under the settlement, it has specifically denied violating New York law.

“Although it is clear that one university employee violated university policy in her relationships with student loan companies, Johns Hopkins as an institution has always stood for a financial aid program that meets the highest ethical standards,” university President William Brody said.

Frishberg was placed on administrative leave on April 9 and resigned on May 18, the university said.

John Hopkins will pay $562,000 to the New York attorney general’s fund for educating college students about the financial aid process, and $562,500 to implement a similar program administered by the Maryland attorney general.

The university also agreed to submit to monitoring by the New York and Maryland attorneys general and to abide by Cuomo’s code of conduct, the AG’s office said.

This entry was posted on Friday, June 15th, 2007 at 10:22 pm and is filed under College Loans, Education, Student Loan. Tags: College, Financial Aid, Student, Student Loan. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.