Be wary of what your financial aid adviser tells you
Happy hour at Dave & Busters, tickets to Fiesta events, lunch from Jason’s Deli — such gifts to the financial aid staff at the University of Texas at San Antonio from loan companies vying for student borrowers were run-of-the-mill, according to e-mails obtained through a public information request and interviews with financial aid director Lisa Blazer.
But they won’t be for long under rules proposed by Democrats in Congress and New York Attorney General Andrew Cuomo. The new rules, which would bar universities from accepting much more than a coffee cup from loan companies, come in response to a widening scandal reverberating through the $85 billion a year student loan industry. The probe was sparked by Cuomo’s investigation into questionable business practices and too-cozy relationships between lenders and university financial aid staff, who typically are viewed by student borrowers as unbiased advisers.
In the past two weeks, financial aid directors at Columbia University and University of Texas at Austin have been fired after revelations that they owned stock in the parent corporation of Student Loan Xpress when the company appeared on the universities’ preferred lender list, a roster meant to help students choose a credible lender. Johns Hopkins University’s financial aid director also resigned last week because she accepted consulting payments from Student Loan Xpress.
You really have to wonder how anyone in the college financial aid offices didn’t stop and think that accepting gifts from private loan companies wasn’t appropriate. Lunch is a gray area but Fiesta tickets, stock and travel aren’t. They are supposed to be there for the students not for the banks. Maybe they have forgotten that.
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Be wary of what your financial aid adviser tells you…
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