NEW YORK - The attorney general of New York is negotiating settlements with eight student loan companies to reform deceptive practices in the industry. A particular focus is the marketing of products so they appear to be federal loans, an official said Friday.

"Some of the seals (used by lenders) looked very similar to those of the federal government," said Alex Detrick, a spokesman for the attorney general's office.

The distinction is important because federal loans have fixed interest rates that are often lower than private loans.

The student loan companies also misled consumers at times about the best loan options on the market, he said.

This group of direct-to-student lenders sends advertising material by mail or market to students online, but do not necessarily have a presence on campus. Students are sometimes offered iPods or gift cards as an incentive to sign up, Detrick said.

The attorney general's office is also preparing to sue student lender Goal Financial LLC for deceptive practices, Detrick said. Unlike the lenders currently negotiating settlements, Detrick said Goal Financial did not signal a willingness to reform its practices. He did not know how many, if any, of the companies would reach a settlement.

Calls to Goal Financial's headquarters in San Diego went to voicemail Friday and were not immediately returned. The company's attorney, Lewis Rose of Kelley Drye & Warren, did not return requests for comment.

Goal Financial was the sixth largest lender of consolidated student loans in the country in 2006, according to Student MarketMeasure, which tracks the student loan industry. Goal Financial made 111,426 loans worth $2.5 billion that year, according to the group.

The attorney general's office sent a letter to Goal Financial in July notifying the company of its intent to sue.

The letter said Goal Financial enlisted students to promote loans on campus and offered incentives for students who secured applicants.

The letter also said Goal Financial's advertising materials gave misleading examples of monthly payment amounts and annual savings.

In addition, the company referred students to a comparison Web site, www.eStudentLoan.com, which is operated by a Goal subsidiary, according to the letter. The site does not disclose that it only lists lenders that pay Goal Financial a fee, Detrick said.

Last year, Attorney General Andrew Cuomo's office helped bring about reforms in the student lending industry when he investigated deals that gave colleges "kickbacks" in exchange for being listed as a preferred lender.

At least 22 schools agreed to adopt codes of conduct with regard to their financial relationships with lenders as a result of the investigation. Several of the lenders targeted in that investigation, including Sallie Mae, formally SLM Corp., and Citibank, a unit of Citigroup Inc., agreed to reforms and to pay a combined $6.5 million into a national fund to educate families and students about loans.

The attorney general's office is now investigating other possible conflicts of interest on college campuses — including deals with credit card, text book and health insurance companies, Detrick said.

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