BALTIMORE (September 6, 2007) - Attorney General Douglas F. Gansler today announced that all of Maryland's public and private colleges and universities have voluntarily signed the "College Loan Code of Conduct." The Code of Conduct was designed to assure parents and students that the process of researching and receiving information about student loans in Maryland is transparent and objective.
Earlier this year, Attorney General Gansler met with representatives from Maryland's colleges and universities to outline the goals of the Code of Conduct and to hear their concerns about the financial aid process in Maryland. Working with the universities, the Attorney General's office developed the Code of Conduct and asked all the schools to adopt it and abide by the restrictions contained in the Code.
"Determining how to finance a college education can be a challenging and often daunting task," said Attorney General Gansler. "Parents and students at Maryland's universities can feel confident that they are receiving the most reliable and unbiased information when seeking information about student loans. While there was no evidence that any of our schools were not operating in the best interests of students, we can now say that all of Maryland's private and public universities have voluntarily agreed to operate under the guidelines contained in the Code of Conduct."
Among the restrictions contained in the Code of Conduct, colleges and universities are prohibited from receiving anything of value in exchange for receiving any advantage sought by the lending institution. Additionally, lenders cannot pay to be placed on a school's preferred lender list. The Code of Conduct also prohibits college employees from receiving anything of more than nominal value from any lending institution when offered in connection with the employees' financial aid work.
RELATED INFORMATION:
Student Loan Company Tried to Buy Preferred Status At Univ. of Maryland, September 6, 2007
http://somd.com/news/headlines/2007/6367.shtml
College Loan Code of Conduct
1. Revenue Sharing Restrictions
Colleges may not receive anything of value from any lending institution in exchange for any advantage sought by the lending institution. Lenders cannot pay to get on a school’s preferred lender list.
2. Gift and Trip Restrictions
College employees may not take anything, including trips, of more than nominal value from any lending institution, when such things are offered in connection with the employees’ financial aid work.
3. Advisory Board Compensation Rules
College employees with responsibility for financial aid work may not receive anything of value for serving on the advisory board of any lending institution.
4. Preferred Lender Guidelines
College preferred lender lists must be based solely on the best interests of the students who may use the list without regard to financial interests of the college.
5. Preferred Lender Disclosure
On all preferred lender lists the college must clearly and fully disclose the criteria and process used to select preferred lenders. Students must also be told that they have the right and ability to select the lender of their choice regardless of the preferred lender list.
6. Loan Resale Disclosure
Colleges may not permit a lender to appear on a preferred lender list unless the lender agrees to disclose to the student at the time of the loan any pre-existing agreement to sell the loan to another lender.
7. Call – Center Restrictions
Colleges may not permit employees or agents of lenders to identify themselves to students as employees of the colleges. No employee or agent of a lender may be employed by a college financial aid office.
MARYLAND OFFICE OF THE ATTORNEY GENERAL 200 St. Paul Place • Baltimore, MD 21202 • 410-576-6300 www.oag.state.md.us
1. Revenue Sharing Restrictions
Colleges may not receive anything of value from any lending institution in exchange for any advantage sought by the lending institution. Lenders cannot pay to get on a school’s preferred lender list.
2. Gift and Trip Restrictions
College employees may not take anything, including trips, of more than nominal value from any lending institution, when such things are offered in connection with the employees’ financial aid work.
3. Advisory Board Compensation Rules
College employees with responsibility for financial aid work may not receive anything of value for serving on the advisory board of any lending institution.
4. Preferred Lender Guidelines
College preferred lender lists must be based solely on the best interests of the students who may use the list without regard to financial interests of the college.
5. Preferred Lender Disclosure
On all preferred lender lists the college must clearly and fully disclose the criteria and process used to select preferred lenders. Students must also be told that they have the right and ability to select the lender of their choice regardless of the preferred lender list.
6. Loan Resale Disclosure
Colleges may not permit a lender to appear on a preferred lender list unless the lender agrees to disclose to the student at the time of the loan any pre-existing agreement to sell the loan to another lender.
7. Call – Center Restrictions
Colleges may not permit employees or agents of lenders to identify themselves to students as employees of the colleges. No employee or agent of a lender may be employed by a college financial aid office.
MARYLAND OFFICE OF THE ATTORNEY GENERAL 200 St. Paul Place • Baltimore, MD 21202 • 410-576-6300 www.oag.state.md.us