College Board ends loan program
Published Aug. 31, 2007
The College Board, a non-profit organization that administers the SAT and Advanced Placement tests, has decided to close its student-loan program, according to a news release.
After Oct. 15, no loan applications will be accepted. Until then, students can continue to borrow loans for the current academic year.
The College Board is leaving the loan business because of new legislation passed that restricts the relationship between lenders and universities. The College Board sponsors gatherings of representatives from schools across the country to help improve educational practices. Under the new legislation, the College Board would not be able to reimburse the attendees from the schools for expenses such as transportation and lodging.
"We have decided that, in the best interest of our members, we have been left with no choice other than to end our student-loan program," College Board Communications Director Sandra Riley said in an e-mail.
Starting with the next academic year, students who borrow from the College Board will need to find a different lender to pay the university bill. The College Board will provide a list of options for students in the coming weeks.
The new regulations on the relationship between lenders and students were put into place after an investigation of about 100 colleges and a handful of student-loan organizations. Officials looked into the practice of lenders who earned spots on a university's preferred lender list though incentives, including financial kickbacks for university officials.
MU's preferred private lender list includes Citibank, which partnered with the College Board to fund the loans, but the College Board itself does not appear on the list.
Amid the controversy, the Missouri General Assembly passed the Student Loan and Sunshine Act, which states that schools and lenders must "adopt strict codes of conduct." The act bans university loan officials from accepting gifts or participating in an advisory board. It also bans revenue-sharing agreements between the university or its officials and lenders.
"We recognize that the legislation was not designed with the College Board in mind," Riley said. "It was designed to address a series of commercial activities that were deemed unacceptable in the arena of student lending. Our membership activities were never the target of this investigation or of the legislation, but the unintended consequence has been that they have been impacted by the legislation."
But Riley said the laws would still ban reimbursement of travel expenses for educators attending their conferences.
"We have received dozens of calls from our members expressing concern about not being able to attend our council meetings, workshops and other gatherings," she said in the e-mail. "If we discontinue reimbursement, some educators would be unable to attend because their institution could not afford to cover their costs."
Riley said losing the program will not have a great effect on the College Board because it only represents a small part of its portfolio.
"It represents less than 1 percent of our revenues," Riley said. "We are concerned about the 15 employees affected."
The College Board will also continue to help students and families find ways to pay for college, Riley said.
"We believe there are many ways, other than being a lender, that we can use the College Board's resources and financial aid expertise to serve institutions and families," Michael Bartini, College Board senior vice president for enrollment, stated in a news release.