Posted on March 22, 2006
Controversy concerning exclusive student loan companies or possible contracts between student loan companies has sparked investigations into university financial aid offices across the country. According to the Associated Press, New York Attorney General Andrew Cuomo accused colleges of collecting benefits and gaining perks from various loan companies.
Investigators have found that some universities across the country have formed exclusive preferred lender agreements with student loan companies. These agreements allow financial aid officers to strongly encourage students to use certain lenders. In return, the financial aid office receives certain benefits.
JMU’s financial aid office is not one of them.
“We have never signed contracts like that, nor will we ever,” said Brad Barnett, senior associate director of the Office of Financial Aid and Scholarships. “We do not have any agreements, at all, to give any lenders any specific amount of business; we don’t push students to take particular loans and we don’t receive benefits.”
The investigation into the alleged corruption has found that certain undisclosed lenders provided benefits that included, among other things, all-expense-paid vacations to exotic spots and computer systems for schools.
JMU’s financial aid office provides loan information to help students make decisions. Its Web site contains a list of preferred lenders whom JMU financial aid advisers think offer students good loan packages.
“We have all of our information on the Web and we try to make sure students have the information available to them,” said Debra Turner, associate director of operations of the Office of Financial Aid and Scholarships. “We are always looking for lenders who give the best benefits to students.”
The preferred lender list, supplied by the financial aid office, contains the names of lenders for the Stafford Loan, the type of loans JMU predominantly deals with. JMU will, however, process a loan with any bank or loan company a student chooses.
“We have identified those who we think are high quality lenders who offer good deals to students, but we will process a loan for any bank a student chooses,” Barnett said.
Cuomo’s office is investigating six lenders, including Sallie Mae, Nelnet Inc., Education Finance Partners Inc., EduCap Inc., the College Board and CIT Group, Inc.
At the end of the day, most students see the office of financial aid as a resource.
“I feel that the JMU financial aid office wants to help me with my finances,” freshman Jenna Bryant said. “They are looking out for students.”
