The University, one of many universities receiving inquiries from the Office of Attorney General of the State of New York concerning student lending practices — as well as an inquiry from the Missouri Office of Attorney General — has agreed with both the Missouri and New York attorneys general to adopt a code of conduct guiding the University’s relations with private lenders from whom the University’s students and their families seek college financing. The University fully and rapidly cooperated with both investigations, and, as the agreements reached April 23 reflect, it denies that any of its past practices have violated Missouri or New York laws. The agreements with the Missouri and New York attorneys general do not involve payment of any fines by the University.
The University embraces the code of conduct as one that reinforces our long-standing commitment to assist all students admitted to the University in arranging the best possible financing for them and reflects a philosophy consistent with the University’s long-standing values and objectives in student financial aid. The student loan world is a difficult and complex one to navigate, and it is vital that students and their families have confidence in the guidance they receive from the University in this realm. The University sees the code of conduct as an opportunity for it to serve as a leader in the higher education community in voluntarily adopting practices and procedures designed to offer confidence-building assurances to all students and families entering the student-lending arena. The resolution of the investigations will assure that there is no disruption or confusion at this peak time in helping students arrange financial assistance for the upcoming year.
The attorneys’ general code of conduct outlines conditions for University employee conduct related to lending institutions, employee membership on lender advisory boards, revenue sharing by lenders, regulation of preferred lender lists, access to electronic loan agreements and promotion of the school-as-lender program. The code of conduct’s core value — the primacy of the student’s interest — has always been at the heart of the University’s practices.
The attorneys’ general inquiries of the University involved a contract that was briefly in force between the University and Education Financial Partners (EFP). The University did not receive any revenue-sharing funds under that agreement, which was in effect from April 1, 2005, until March 31, 2006. The University contracted with EFP for one year — having rejected EFP’s request for an exclusive relationship with the University — because this lender offered an uncommon benefit whereby student borrowers of non-federal funds did not need a co-signer. The University received no revenue-sharing income from EFP. Only three loans totaling less than $25,000 were issued by EFP to three University students during the one-year period of the agreement. The EFP affiliation was allowed to lapse by the University more than a year ago.
Mary butkus