Eight U.S. Lenders agree to student loan changes -

NEW YORK (Reuters) - Eight U.S. student lending companies have agreed to change the way they directly market loans, including a ban on some contests, mailing and advertising practices, officials said on Tuesday.

New York Attorney General Andrew Cuomo, in announcing settlements with firms stemming from a nationwide investigation by his office, called on the rest of the direct marketing industry to adopt the same standards.

"These settlements are a major step forward in cleaning up an industry where false and misleading advertising practices have been all too rampant," Cuomo said in a statement. "Unsolicited and deceptive mailings that are sent to the homes of students are more than a nuisance, they can result in students being buried in mountains of debt for years."

It said that Nelnet Inc (NNI.N), Campus Door Inc, GMAC Bank, NextStudent Inc, Xanthus Financial Services Inc, EduCap Inc, Graduate Loan Associates L.L.C., and MRU Holdings Inc UNCL.O, doing business as My Rich Uncle, were part of a settlement.

Under the agreement, seven firms will pay a total of $1.4 million to New York State. Last October, Cuomo's office issued subpoenas and requests to dozens of companies and lenders making loans directly to students.

The firm My Rich Uncle settled voluntarily and is not paying into the fund, the Attorney General's office said.

Included in the new standards is a ban on the use of logos and return addresses that made it look like the lender's solicitation to consumers was from the federal government or the student's current lender.

Firms may not mail fake checks or false rebate offers on current loans to entice students to take out loans and they may not provide inducements such as gift cards, iPods, and GPS devices. They are also barred from advertising interest rates that are not available to the majority of borrowers who take out loans with the lender.

(Reporting by Grant McCool, editing by Dave Zimmerman)