Many universities are profiting not only from the skyrocketing cost of tuition, but also from student loans.

Illinois Senator Dick Durbin is urging the Inspector General of the Department of Education to investigate conflicts of interest between college loan lenders and universities. Associate Director of Financial Aid Victor Martinez says the University of Illinois does not show preference to specific lenders.

“We don’t encourage choosing. We provide general lists of different lenders tha+ are available for students to look at and apply for.”

A recent article from the New York Times accuses lenders of offering several universities incentives based on how much students borrow. Examples include all-expense paid trips, iPods, bonuses and donations to the institutions. Martinez refuses to speculate about other universities and their prefered loan policies.

“I will assume that the institutions that decided to participate in those kinds of programs had the reasons and will have the responses appropriate.”

Martinez believes private loans are essential to fund students’ education. However, he says that it is the student’s choice, not the university’s.

“I hope the Department of Education can come up with solutions for students regarding additional funds to cover their educational costs. There is no doubt that the private lenders are providing funds to students to cover their educational expenses. Now, which one is better or which one is not, I believe is not our decision. It is part of the students’.”

According to the New York Times, students took out 13.8 billion dollars in private loans in the 2004-2005 school year, more than ten times the amount borrowed a decade ago.