The purpose of this policy is to prohibit conflicts of interest in situations involving private educational loans and to establish standards of conduct for lenders listed on the Ferris State University Private Lender List.
This Policy applies to all lenders listed on the Ferris State University Private Lender List and to all employees and affiliates of Ferris State University who have responsibilities related to private educational loans. Agents of the University with responsibility for education loans or other student financial aid are also expected to abide by the terms of this Policy.
Conflict of Interest: A conflict of interest exists when any employee’s financial interests or other opportunities for personal benefit may compromise, or reasonably appear to compromise, the independence of judgment related to the selection and process of private loan lenders listed on the Ferris State University Private Lender List.
Gift: Any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimus amount. The term includes a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.
The term “gift” does not include any of the following:
- Standard materials, activities, or programs on issues related to a loan, default aversion, default prevention, or financial literacy, such as a brochure, a workshop, or training.
- Food, refreshments, or training that are part of a training session to improve service if training contributes to the professional development of the agent.
- Training or informational material furnished to the University as an integral part of a training session that is designed to improve the service of a lender, guarantor, or servicer of Private Educational Loans to the University, if such training contributes to the professional development of the University’s employees.
- Favorable terms, conditions, and borrower benefits on a Private Educational Loan provided to a student employed by the University or an employee who is the parent of a student if such terms, conditions, or benefits are comparable to those provided to all students of the University and are not provided because of the student’s or parent’s employment with the University.
- Entrance and exit counseling services provided to borrowers to meet the University’s responsibilities for entrance and exit counseling under federal law, so long as the University’s employees are in control of the counseling, and such counseling does not promote the products or services of any specific lender.
- Philanthropic contributions to an institution from a lender, servicer, or guarantor of education loans that are unrelated to education loans or any contribution from any lender, guarantor, or servicer that is not made in exchange for any advantage related to Private Education Loans.
- State education grants, scholarships, or financial aid funds administered by or on behalf of a State.
Opportunity pool loan: A private education loan made by a lender to a student attending the University or the family member of such a student that involves a payment, directly or indirectly, by the University of points, premiums, additional interest, or financial support to such lender for the purpose of such lender extending credit to the student or the family.
Revenue-sharing arrangement: An arrangement between the University and a lender to (a) provide or issue a Private Education Loan to students at the school; and (b) the school recommends the lender or loan products of the lender and in exchange, the lender pays a fee or provides other material benefits, including revenue or profit sharing, to the institution.
Ferris State University Conflict Of Interest Policy/Code Of Conduct For Private Lenders
The University will not enter into any revenue-sharing arrangement with any lender.
Interaction with Borrowers
Under no circumstances will the University assign a student’s private education loan to a particular lender, or refuse to certify or delay certification of any private loan, based upon the borrower’s selection of lender or guaranty agency.
The University will not request or accept from any lender any offer of funds to be used for private education loans*, including funds for an opportunity pool loan, to students in exchange for the University providing concessions or promises regarding providing the lender with a specified number of private educational loans or a private lender arrangement for private education loans.
*As defined in the federal Truth in Lending Act, 15 UCSA §1631 et seq.
The University will not permit private education loan lenders to use the University’s name, emblem, mascot, logo, or any other words, pictures, or symbols associated with the University to imply endorsement of private educational loans by that lender.
The University will not request or accept from any lender any assistance with call center staffing or financial aid office staffing. Nothing in this section, however, prevents the University from accepting assistance from a lender related to:
- Professional development training for its staff;
- Providing educational counseling materials, financial literacy materials, or debt management materials to borrowers, provided that such materials disclose to borrowers the identification of any lender that assisted in preparing or providing such materials; or
- Staffing services on a short-term, nonrecurring basis to assist the University with financial aid-related functions during emergencies, including State-declared or federally declared natural disasters, federally declared national disasters, and other localized disasters and emergencies identified by the Secretary of Education.
Private Lender Code of Conduct
Conflicts of Interest
No University employee shall have a conflict of interest with respect to any educational loan lender for which the employee has responsibility related to the processing of said loans or the selection of private lenders.
No University employee may accept any gift from a lender, guarantor, or servicer of private education loans. A gift to a family member of an employee or to any other individual based on that individual’s relationship with the employee shall be considered a gift to the employee if the gift is given with the knowledge and acquiescence of the employee and the employee has reason to believe the gift was given because of the employee’s position at the University. Token awards from professional associations (state, regional, or national) that recognize professional milestones or extraordinary service to parents and students, or scholarships for conference attendance or other professional development opportunities, may be accepted.
Prohibited Contracting Arrangements
No University employee shall accept from any lender or affiliate of any lender any fee, payment, or other financial benefit (including the opportunity to purchase stock) as compensation for any type of consulting arrangement or other contract to provide services to a lender or on behalf of a lender relating to education loans.
Advisory Board Compensation
An officer, employee, or contractor of a lender, guaranty agency, or servicer of private loans may serve on a board of directors, or serve as a trustee of an institution if the institution has a written conflict of interest policy that the board member or trustee must recuse themselves from decisions regarding private loans.
Reimbursement of Expenses
Expenses incurred while attending professional association meetings, conferences, or in connection with service on an advisory board, commission, or group described in Section V. D. of this Policy must be paid by the University. Entertainment expenses such as concert or sports tickets or greens fees may not be accepted. Employees are expected to personally pay for such expenses or request reimbursement from the University in accordance with University policy.
Employees may occasionally need to share meals with employees of lenders, guaranty agencies, the State of Michigan, or other colleges or universities in the course of business.
Meals offered as a part of meetings, conferences, or other events may be accepted if all participants in the meeting or event are offered the meals or if the meals are included as a part of a registration fee.
Lender violations of this policy may result in immediate removal of the lender from the Private Lender List, without prior notice. Employee violation of this policy may result in disciplinary action up to and including termination of employment.