Financial Lenders Code of Conduct
Federal and State governments have expressed concern over predatory lenders of financial aid and the cozy relationships some have developed with several colleges and universities throughout the country. Some State Attorneys General as well as higher education associations have recommended that colleges and universities adopt a code of conduct defining their relationship with these lenders.
Pine Manor College has taken a proactive stance. The following Code is now the official position of the College and the Standard for Financial Aid as we move forward.
1 Prohibition Against Certain Remuneration to the College
1.1 The College shall not solicit, accept, or agree to accept anything of value from any Lending Institution in exchange for any advantage or consideration provided to the Lending Institution related to its Student Loan activity. This prohibition shall include, but not be limited to:
1.1.1 Any Revenue Sharing agreements;
1.1.2 The College’s receipt from any Lending Institution of any computer hardware for which the College pays below market prices; and
1.1.3 Printing costs or services.
1.2 The prohibition of Section 1.1 shall not be construed to prohibit the College from soliciting, accepting or agreeing to accept favorable terms or conditions of a Student Loan inuring directly to Borrowers.
1.3 The College shall not solicit, accept, or agree to accept from any Lending Institution any computer software for the electronic management of Student Loan disbursements unless such software can manage Student Loan disbursements from all Lending Institutions.
2 Prohibition Against Remuneration to College Employees
2.1 The College shall require and ensure that no officer, trustee, director, employee, or agent of the College accepts anything more than nominal value on his or her own behalf or on behalf of another during any 12-month period from, or on behalf of, a Lending Institution.
2.2 The prohibition of 2.1 shall include, but not be limited to, a ban on any payment or reimbursement by Lending Institutions to any College employee for lodging, meals, or travel to conferences or training seminars.
2.3 The prohibition of Section 2.1 shall not be construed to prohibit any officer, trustee, director, employee, or agent of the College from conducting non-Student Loan business with any Lending Institution.
3 Limitations on College Employees Participating on Lender Advisory Boards
3.1 The College shall prohibit any officer, trustee, director, employee, or agent of the College from receiving any remuneration for serving as a member or participant of an advisory board of a Lending Institution, or receiving any reimbursement of expenses for serving in such capacity provided, however, that participation on advisory boards that are unrelated in any way to Student Loans shall not be prohibited.
3.2 The prohibition of Section 3.1 shall not prohibit any officer, trustee, director, employee, or agent of the College, who is not involved in the affairs of the College’s financial aid office, from serving on a Board of Directors of a publically-traded or privately-held company.
4 Preferred Lender Lists
4.1 The College shall not provide or otherwise disseminate or make available a Preferred Lender List that:
4.1.1 is used to deny or otherwise impede a Borrower’s choice of lender; or
4.1.2 contains fewer than three unaffiliated Lending Intuitions.
4.2 Every brochure, web page or other document that sets forth a Preferred Lender List must disclose in plain language the process by which the College selected lenders for the list, including but not limited to the criteria used in compiling the list and the relative importance of those criteria.
4.3 Every brochure, web page or other document that sets forth a Preferred Lender List or identifies any lender as being on said Preferred Lender List shall state in the same font and same manner as the predominant text on the document that a Borrower has the right and ability to select the Lending Institution of his or her choice.
4.4 The College’s decision to include a Lending Institution on any Preferred Lender List shall be determined solely by consideration of the best interests of Borrowers who may use the Preferred Lender List, without regard to the pecuniary interests of the College.
4.5 The composition of any Preferred Lender List shall be reviewed and updated at least once a year by the College.
4.6 No Lending Institution shall be placed on any Preferred Lender List unless the Lending Institution provides assurance to the College and to Borrowers that advertised benefits upon repayment will continue to inure to the benefit of Borrowers regardless of whether the lending institution’s Student Loans are sold.
4.7 No Lending Institution that, to the College’s knowledge after reasonable inquiry, has an agreement to sell its Student Loans to another unaffiliated Lending Institution shall be included on any Preferred Lender List unless such agreement is disclosed therein in the same font and same manner as the predominant text on the document in which the Preferred Lender List appears.
5 Prohibition of Lending Institution’s Staffing of College Financial Aid Offices
5.1 The College shall prohibit and shall ensure that no employee or other agent of a Lending Institution is ever identified to students of the College or their parents as an employee or agent of the College.
5.2 The College shall prohibit and ensure that no employee, representative, or agent of a Lending Institution provides staffing services to the College’s financial aid office.
5.2.1 The prohibition of Section 5.2 shall not be construed to prohibit any Lender from providing “entrance” and “exit” interviews or financial literacy activities provided, however, that the College shall ensure that any such employee, representative, or agent of a Lending Institution conducting such interview identifies himself or herself as a representative of the Lending Institution and does not promote the Lending Institution’s products during such interview.
8 Limitations on “Opportunity Loans”
8.1 The College shall not arrange, in exchange for certain minimum loan volume or other benefit that a College agrees to provide to the Lending Institution, with a Lending Institution to provide any Opportunity Loans to Borrowers.
9.1 “Borrower” means a student attending Pine Manor College, or a parent or guardian of the student, who obtains a Student Loan from a Lending Institution to pay for or finance higher education expenses.
9.2 “College” means Pine Manor College.
9.3 “Lending Institution” means any entity that directly or through an affiliate engages in the business of making or securitizing Student Loans, or any entity or association of entities that guarantees Student Loans.
9.4 “Opportunity Loans” means Student Loans that a Lending Institution agrees to make up to a specified aggregate amount to students with poor or no credit history, who the Lending Institution claims would otherwise not be eligible for the lender’s alternative loan program.
9.5 “Preferred Lender List” means a list of recommended or suggested Lending Institutions that a College makes available for use, in print or in any other medium or form, by Borrowers, prospective Borrowers, or others.
9.6 “Revenue Sharing” means any arrangement in which a Lending Institution pays a College or an affiliated entity or organization of a College a percentage of the principle of each loan directed towards the College from a Borrower at the College or any form of commission related to the loan.
9.7 “Student Loan” means any loan that is made, insured, or guaranteed under “Part B of Title IV of the federal ‘Higher Education Act of 1965’” or any private loan issued by a Lending Institution for the purposes of paying for or financing higher education expenses but not including credit cards or home equity loans.