Issues in student loans examined
The inspection is in response to possibly corrupt ties.
April 10, 2007
In response to unethical, and possibly even corrupt ties between student loan lender authorities and higher education institutions in New York, Missouri Attorney General Jay Nixon has decided to examine the college and lender relationships in Missouri.
Administrators at Columbia University, the University of Texas at Austin and the University of Southern California were reported to have stock in a lender that they placed on their preferred list for students, according to insidehighered.com.
New York Attorney General Andrew Cuomo sent letters to Columbia University and other higher education institutions in the state in order to obtain details regarding the lender programs with which each institution deals.
In response to the ongoing investigations, Terry Hartle, senior vice president for government and public affairs at the American Council on Education, stated in a news release that the stock ownership "is inexcusable and indefensible."
According to Nixon's office, the investigations in other states, especially New York, led Nixon to seek out information from Missouri's higher education institutions.
The office said Nixon's decision to review the issue also came from high rates and few choices of lenders.
"Thus far, using the framework that was used in New York, we have not found anything wrong with our policies," said Stephen Lehmkuhle, UM system vice president of academic affairs.
Lehmkuhle said the UM system is cooperating completely with the inquiry.
He explained the criteria used by Cuomo in New York and said Nixon was using identical standards.
Lehmkuhle said the first concern was whether any campuses placed loan companies on preferred lender lists for students.
"None of our campuses have agreements with lenders that would allow us to be on preferred lender lists," Lehmkuhle said.
Lenders placed on preferred lists can often cause students to bypass research about which loan companies to use.
Another item Nixon plans to look at is whether any financial aid directors at each university serve on the board of a lender with a paid position.
"None of our financial aid directors serve as paid positions," Lehmkuhle said. "We are examining those to note if there is a perceived conflict of interest in terms of providing lenders support for our students, and that's something that we'll share with our attorney general."
Lehmkuhle said some financial aid directors in the UM system are on advisory boards for some of the lenders, but they do not hold paid positions.
A third measure Nixon will examine is the funds flowing back to the institution.
"The question was if they didn't best serve the students but benefit the institution," Lehmkuhle said. "We do not receive any benefits as an institution."
Lehmkuhle said each UM system campus, which includes MU, UM-Kansas City, UM-St. Louis and Missouri University of Science and Technology, formally known as UM-Rolla, have different types of loan companies with which they work.
"For example, at UMKC they need to find loans that are inexpensive and can serve a large number of professional students," Lehmkuhle said. "Whereas at Columbia, they're much more focused on finding loans for students that support undergraduates."
Nixon is in the initial stages of the examination but will continue to seek information regarding the college lender ties in Missouri.
"We're continually looking and talking with all our financial aid officers," Lehmkuhle said.
More April 10, 2007 News Stories
- Bar owners complain about smoking ban — Local bar owners try to put ban on ballot despite initial failure.
- Black Culture Center welcomes athletes — The Black Culture Center acts as an advising family for athletes.
- Campus Blotter — Thursday, April 5 Police are investigating the theft of a pair of shoes from the Student Recreation Complex between 12:15 ...
- Columbia Blotter — Thursday, April 5 Mac G. Cannell, 22, of 5407 Arrowwood Drive, on suspicion of disturbing the peace William C. Handy-Buford, ...
- Committee continues condom discussions — The committee hopes to have a plan outlined by semester's end.
Most recent News Stories
- Jesse Hall renovations reveal 67-year-old mural — The mural depicts an art class from the 1940s.
- MU breaks enrollment record — MU enrollment sets new record at start day.
- Deaton supports Alden, Hearnes Center Fee stays put — Deaton affirmed Athletic Director Mike Alden's decision.
- STRIPES drives initiative to lower driving age requirement — Last year STRIPES went $1,000 over their $5,000 budget for gas.
- Condoms to be put in residence halls — The plan to put condom dispensers in residence halls may still face changes.