New Jersey Attorney General Stuart Rabner said yesterday that he had subpoenaed 61 private and public colleges in New Jersey and 17 lenders in a widening national inquiry into alleged improper relationships between schools and the $85 billion student-loan industry.

Following in the footsteps of New York Attorney General Andrew Cuomo, Rabner announced that his office and the Division of Consumer Affairs had sent subpoenas and were investigating New Jersey's student-loan industry in light of recent allegations that lenders had made payments to colleges to have the schools promote specific companies to students as "preferred lenders."

The subpoenas were sent Thursday and yesterday to all 61 private and public institutions of higher education in New Jersey, including state and private universities, business schools, and community and county colleges, Rabner's communications director, David Wald, said. The list includes Princeton, Rutgers, Seton Hall, Fairleigh Dickinson, Rowan and Monmouth Universities, and Camden County College, Wald said.

"We are working with the New York Attorney General's Office and also with information from Sen. Edward Kennedy's investigation," Wald said in an interview. Kennedy (D., Mass.) is chairman of the U.S. Senate Education Committee, which is investigating the college-loan industry.

"The key here is whether students' interests have been harmed," Wald said. "The subpoenas are intended to collect information to be able to determine that, and whether there were any deceptive practices that would be a violation of New Jersey's Consumer Fraud Act.

"Are they preferred lenders based on objective criteria, or are they preferred lenders because there was some financial incentive involved that students didn't know in trying to get a loan?" Wald said. "We are trying to collect as much information as possible. This is the first step."

New Jersey's Higher Education Student Assistance Authority, which provides about $1.6 billion annually in financial aid to New Jersey students, also received a subpoena, Wald said.

Rabner told New Jersey lawmakers Monday that he was working with Cuomo, who found cases of colleges getting a percentage of loan proceeds from lenders granted "preferred" status by the schools.

Cuomo also has contended that some college loan officers are receiving trips to luxury resorts and gifts from lenders.

Cuomo's office said 22 schools and five lenders, including Sallie Mae, have settled with the New York attorney general and agreed to a code of conduct.

Rabner said in a statement: "It is unacceptable for the high cost of college to be compounded by student-loan rates inflated by too cozy relationships between colleges and lenders.

"What we would hope and expect is that colleges maintain preferred-lender lists only with students' financial interests in mind."

Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.