Lamb signs new order to regulate aid
The order is designed to put current practices into writing.
Published Oct. 23, 2007
Interim UM system President Gordon Lamb signed an executive order on Monday that would regulate student financial aid offices' relationships with lenders.
Earlier this year, Missouri Attorney General Jay Nixon conducted a series of inquiries on university lending practices. The inquiries were a response to New York Attorney General Andrew Cuomo's investigation, which uncovered inappropriate relationships between institutions and lending companies.
Nixon also asked Missouri colleges and universities to sign a lending practices code of conduct. The UM system has not signed his agreement because the executive order is an alternative, UM system spokesman Scott Charton said.
"We think it's best to keep confidence among our most important stakeholders, that is, our students and their parents, that we can adopt our own best practices," Charton said.
He also said the executive order gives the university flexibility to adopt its best practices without reporting to future attorneys general.
He said other universities, like the University of Central Missouri in Warrensburg, have adopted similar executive orders.
MU Student Financial Aid Director Joe Camille said the order doesn't place any new requirements on the university.
"It just puts into writing current practices at MU," he said.
Although MU maintains a preferred private lenders list, Camille said more than 97 percent of students' loans are Federal Direct Loans. He added that the preferred private lenders list is determined by comparing interest rates and student service.
"We've been doing it right here," he said.
But he said the executive order still helps reassure MU students that the university is acting properly.
"This executive order reduces our policies to writing, and that gives people more assurance," he said.
The executive order prevents the university and UM employees from accepting gifts from lenders, requires that the university disclose factors considered in creating a preferred lenders list and prohibits lending institutions from providing staff for UM system financial aid offices. It also bars "opportunity loans" that wouldn't be normally be available unless the university directs business to the company.
Charton said he acknowledges that some of the language mirrors that of Nixon's code of conduct, but he said that none of the language in the executive order is weaker than that of the attorney general's code of conduct.
The executive order is the 36th issued by a UM system president.
"Our campus financial aid offices have been and will continue to be committed to providing the best services for our students and their families," Lamb stated in a news release. "This executive order will boost confidence that the university uses the best practices while enhancing clarity and consistency in student lending practices across our four campuses."
— Staff Writer Nathan Winters contributed to this report
