JEFFERSON CITY - Months after Missouri’s attorney general proposed a voluntary code of conduct for student loan activities by Missouri’s public and private universities, the University of Missouri System has not signed the agreement and neither has a majority of the state’s other universities.
Among the provisions, the code prohibits kickbacks to schools, requires information disclosures about preferred lenders and limits school employees’ participation on lender advisory boards.
UM System spokesman Scott Charton said the four-campus system has not been contacted about signing a state-sponsored student loan code of conduct regarding its preferred lender list.
“The discussion of a code of conduct began in the wake of the New York attorney general’s investigation, with the Missouri attorney general’s office sending questions to institutions around our state,” Charton said. “Thus, the Missouri attorney general’s office has already taken initiative, and the university will wait to see whether the attorney general has further inquiries or requests of us before evaluating whether we should set a code of conduct.”
Attorney General Jay Nixon drafted the code of conduct in March after New York began a national investigation of the relationship between student loan lenders and universities. The investigation explored whether universities steer students to preferred lenders and get monetary kickbacks for doing so.
As of Sept. 20, 21 Missouri universities have voluntarily signed the contract, including 12 public and nine private schools. That number includes Missouri State University and Truman State University, which signed the code in September. The attorney general’s office said it has contacted all 79 of Missouri’s colleges and unversities about signing the conduct code.
Stephens College and Columbia College have not signed the conduct code.
In June, the Coordinating Board for the state Higher Education Department completed its own investigation of the relationship between lenders and Missouri schools, finding no evidence of serious wrongdoings or ethical violations in the 59 universities that responded.
The department’s investigation included all four UM System campuses, Stephens College and Columbia College.
The investigation also found that more than a half of the responding institutions have written policies about accepting gifts from lenders. Others indicated they were in the process of developing similar policies.
Department spokeswoman Wendy Baker said the board’s inquiry has no bearing on Nixon’s investigation and that it is primarily the schools’ decision whether to sign the agreement.
MU’s Student Financial Aid office contacted lenders at least two years ago — before the New York investigation began — to inform them the university would not accept gifts or benefits, MU spokesman Christian Basi said.
“We do not take any gifts or money from lenders and have had that policy in place for quite some time,” Basi wrote in an e-mail.
Charton said the UM System does not have a specific code of conduct for lenders, and the system is monitoring legislation and regulatory efforts in regard to student lending before it considers a code of conduct.
MU has four loan agencies on its preferred lender list for undergraduate and graduate students. None of those companies have been investigated by the New York attorney general.
According to the MU Financial Aid Web site, the preferred lenders are chosen by comparing interest rates, student benefits and customer service.
Following the New York investigation, Nixon began looking at state universities and colleges and discovered an inappropriate relationship between Washington University in St. Louis and the student lender Education Financial Partners, said John Fougere, a spokesman for Nixon’s office. Washington University has since signed Nixon’s voluntary code of conduct.
“They were a school where we thought they had an inappropriate relationship with lenders,” Fougere said.
Fougere said he is unaware of the UM System planning to sign the agreement but said that it would be welcome. He said the agreement, though not legally binding, makes consumers feel empowered and helps schools in the long run.
“It’s an opportunity for schools to demonstrate to the students and families that they are above the board,” Fougere said.
Charton said the UM System has cooperated with Nixon’s investigation and he cannot comment further because it is ongoing.
Fougere said the attorney general’s office is still investigating schools but has not found any other instances of misconduct.
For more information or to see recent schools that have signed the agreement, go to ago.mo.gov/newsreleases/2007/Three_more_colleges_enter_code_of_conduct_agreements_regarding_student_loan_industry