As a financial aid officer at Acme Community College, Bonnie looks forward to an annual conference of financial aid officers at other colleges in her state. Typically, several lenders maintain vendor booths at this conference where informational brochures and souvenirs are distributed free of charge. At one such booth, Bonnie accepts from the lender's representative a disposable pen that bears the lender's trademark logo.
Under the Maricopa Student Loan Code of Conduct, would Bonnie's acceptance of the disposable pen violate the Code?
No. The value of the pen is nominal. In all likelihood, the retail value of the disposable pen Bonnie was offered would not exceed ten dollars. Accepting the pen in this manner would not violate the Code.
The Code not only prohibits individuals from receiving items of value from lenders, but it contains restrictions on Colleges accepting it as well. It prohibits the Maricopa District or any of its Colleges from accepting "anything of value from a student loan lender in exchange for any advantage or consideration provided to the lender related to its education loan activity." This prohibition includes (but is not limited to) a College's receipt from any lender of any computer hardware for which it pays below market prices; preferential rates for, or access to, a lender's other financial products; and printing costs or services.
Colleges often maintain--for the benefit of students and parents--so-called preferred lender lists. These lists include the names of suggested, recommended or preferred lenders. If a College is to maintain such a list, the Maricopa Student Loan Code of Conduct requires that it be developed and maintained "based solely on the best interests of students and parent borrowers."
Moreover, the College must disclose the process and criteria by which the list was assembled, the comparative information regarding interest rates and other benefits offered by the lenders, and that borrowers have the right and ability to select lenders not included on the list.
Each preferred lender list must contain at least three student loan lenders which are not affiliates of one another, and the College must--at least annually--review and update its preferred lender list.
Finally, a College must require that all lenders on a preferred lender list commit in writing to disclose to a borrower before a loan agreement is signed whether there is an existing agreement to sell loans to another lender, and if so, the contact information for the lender who will be purchasing the borrower's loan. The College must inform student and parent borrowers that lenders can, and do, sell student loans, and encourage borrowers to contact their lenders for more information. Also, the College may remove a lender from its preferred lender list if that lender sells loans without ensuring that the advertised loan terms and benefits are honored with the new lender.
Under the Code, a College may not allow a lender included on a preferred lender list to use the name, emblem, or logo of either the College or the Maricopa District, as well as other words, pictures, or symbols readily identified with either the College or Maricopa in the marketing of private educational loans to students that implies that either the College or Maricopa endorses the private educational loans that the lender offers.
Maricopa's Student Loan Code of Conduct requires each College to inform borrowers of the procedures for completing a Master Promissory Note or other loan agreement with the lender of the borrower's choice, whether or not the lender appears on any preferred lender list the College might maintain.
Also, the Code holds that a College may not request or accept from any lender any assistance with call center or financial aid office staffing, including in-person school-required initial or exit counseling, except as permitted by applicable federal student loan requirements.
Moreover, a College must ensure that any lender employees on campus are accurately represented as such and not misidentified as College employees. While lenders may provide professional development training to financial aid officers at the College and participate in outreach activities that promote financial literacy, lender employees must clearly disclose the name of the entity preparing any written materials they might distribute and may not promote the lender's products.
Page Updated 09/25/12