7.  STUDENT LOANS

a.  Institutions are authorized to borrow funds from federal government loan programs to provide funds for loans to students.  Any matching fund requirements may be transferred from the General Fees Fund.

b.  Institutions offering student loans or facilitating the offering of federal direct student loans or student loans by third party financial institutions shall, at a minimum, adhere to the following Student Loan code of Conduct: 

i.  Preferred Lender Guidelines

Preferred or suggested lender lists used by state universities shall be based solely on the best interest of students and parents who may use the lists, and without regard to the financial interests of the university.

ii.  Lender Disclosures

All preferred or suggested lender lists maintained by a state university shall clearly and fully disclose the criteria and process used to select the lenders included on those lists.  Students and parents shall also be told that they have the right and ability to select a lender of their choice, regardless whether such lender appears on the university’s lender list.  If an institution does not generate a “preferred or suggested lender list,” but instead lists all the lenders the institution works with, then it is not necessary to publish how or why those lenders were selected.  In such instances, students shall be provided with an historical list of lenders that students have used in securing their student loans over the past five years.

iii.  Revenue Sharing

State universities shall not accept anything of value from any student loan lender in exchange for any advantage sought by the lender.  Lenders shall not be required or allowed to pay to be placed on a university’s preferred or suggested lender list.

iv.  Gifts and Trips

Except for reasonable and customary transactions in the course of business unrelated to the employee’s official position, state university employees who are directly involved in the student lending process shall not accept anything of value from any student loan lender.  This includes gifts or trips of any kind.  This provision shall not be read to preclude a university chief executive officer from serving on the board of any bank, as long as procedures are in place at the university to manage any real or apparent conflict of interest.

v.  Advisory Board Membership

Except for reasonable and customary transactions in the course of business unrelated to the employee’s official position, state university employees who are directly involved in the student lending process shall receive no compensation or anything of value for serving on the advisory board of any student loan lender.  This provision shall not be read to preclude a university chief executive officer from serving on the board of any bank, as long as procedures are in place at the university to manage any real or apparent conflict of interest.

vi.  Lender Identification

No employee of any student loan lender shall work in or provide staffing in a state university financial aid office.  In addition, state universities shall direct employees of student loan lenders to clearly identify themselves as employees of the lender and to never identify themselves as university employees when meeting or speaking with students or parents.