Alan is General Counsel for Acme Community College. He is also a member of a lender's advisory board, and receives $100 for each meeting of the board that he attends. He has no concern about this since he does not work in the College's financial aid department.
Under the Maricopa Student Loan Code of Conduct, would Alan be subject to the Code?
Yes. Even though Alan does not work in the College's financial aid department, he is an employee of the College; therefore, he is subject to the Student Loan Code of Conduct.
One important way in which the Code promotes accountability is to require arms-length relationships between Maricopa employees and student loan lenders. Accordingly, the Code prohibits an employee from accepting "any remuneration or reimbursement of expenses for serving as a member of or otherwise participating on a student loan lender's advisory board or committee, consistent with applicable federal student loan requirements."
In the previous scenario, Alan--as a College employee--would not be permitted under the Code from accepting any remuneration or reimbursement of expenses for serving on the lender's advisory board.
Another example of how the Code requires arms-length relationships with student loan lenders is its prohibitions against financial dealings by Maricopa employees that would create a conflict of interest. It requires that any person employed in a financial aid office or who otherwise has direct responsibilities with respect to educational loans or other financial aid shall:
- avoid any equity or other interest in any student loan lender other than a remote interest;
- avoid consulting or similar financial relationships with student loan lenders; and
- comply with Maricopa's policies on conflict of interest.
A "remote interest" is defined as the ownership of less than three per cent of the shares of a corporation for profit, provided the total annual income from dividends, including the value of stock dividends, from the corporation does not exceed five per cent of the total annual income of such officer or employee and any other payments made to that person by the corporation do not exceed five per cent of his or her total annual income.
The Code also prohibits a school employee from accepting or soliciting anything of other than nominal value from a student loan lender. The term "nominal value" means a total retail value of not more than ten dollars ($10.00) as calculated over a 12-month period. This does not prohibit a College employee from conducting "non-student lending business with any lender or accepting or soliciting anything of other than nominal value in any activity unrelated to student loans."
Page Updated 09/25/12