updated 4/18/2007 9:01:01 AM ET 2007-04-18T13:01:01

New York Attorney General Andrew Cuomo on Tuesday enlisted the support of his counterparts in other states to help investigate what he considers kickbacks in the $85 billion student loan industry.

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Attorneys general and their representatives from more than 40 states participated in the conference call, said Angelita Plemmer of the National Association of Attorneys General.

“They discussed the importance of cooperation in the ongoing investigation and the need to coordinate,” she said.

The law enforcement officials brainstormed on strategies for investigating the agreements in which lenders have provided cash, gifts, trips, tuition payments, stock options and more to become a “preferred lender” at a college even if the lender doesn’t have the best rate or terms for students.

“We’ve been on this a few weeks now pretty much nonstop,” said Cara Smith, spokeswoman for Illinois Attorney General Lisa Madigan. “We are very supportive of states across the country looking at their own universities.”

For Cuomo, the conference call was part of his effort to expand the probe nationally. He is scheduled to testify before a congressional committee next week.

“This is a widening, national scandal and we need to address it as such,” Cuomo said.

On Tuesday, the University of Texas System told its 15 campuses to stop posting preferred lender lists for students seeking loans and asked financial aid offices to report any benefits they’ve accepted from lending firms.

And in California, Attorney General Jerry Brown demanded that two finance companies turn over details of their business deals with state colleges and universities.

Brown said Tuesday that he sent letters to San Francisco-based Education Finance Partners Inc. and San Diego-based Student Loan Xpress to determine if the lenders made unlawful payments to the institutions.

Representatives of Education Finance Partners and Student Loan Xpress did not return telephone calls seeking comment. CIT Group Inc., which acquired Student Loan Xpress in 2005, suspended the subsidiary’s top three executives last week because of Cuomo’s investigation.

Cuomo’s office is investigating the financial relationship between at least 100 colleges and 13 lenders. Three more lenders agreed to change their business practices and paid a combined $6.5 million to end probes of their activities.

Cuomo announced a $2.5 million settlement with Education Finance Partners on Monday. SLM Corp., commonly referred to as Sallie Mae, and Citigroup Inc.’s Citibank previously settled for $2 million each.

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