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ERIC Number: EJ766198
Record Type: Journal
Publication Date: 2007-Apr-6
Pages: 1
Abstractor: ERIC
Reference Count: N/A
ISBN: N/A
ISSN: ISSN-0009-5982
U.S. Officials Scrutinize Colleges' Deals with Lenders
Field, Kelly
Chronicle of Higher Education, v53 n31 pA1 Apr 2007
In December 2005, purchasing agents at Florida International University issued a request for proposals seeking banks and student-loan companies for a list of "preferred lenders" that the university planned to give to prospective borrowers. The request alone was not unusual. Many colleges use competitive bidding to secure attractive terms and conditions for students and their parents. What was unusual about this request was the conditions it placed on inclusion. To be considered for the list, lenders had to agree to sponsor at least a dozen financial-aid workshops and recruitment events for new and prospective students and their parents, and to provide refreshments at the events. They also had to agree to make thousands of calls to student borrowers to remind them to sign their promissory notes, complete entrance counseling, and renew their applications for federal student aid. According to Francisco Valines, Florida International director of financial aid, there is nothing wrong with the requirements as they were included in the context of a bid. However, the U.S. Education Department does see something wrong with asking lenders for staff support in exchange for a spot on a preferred-lender list. And the department may soon ban such arrangements. This year it issued draft regulatory changes that would prohibit colleges from soliciting "financial or other benefits" in return for placement on their lists of lenders. Department officials say that change and others are necessary to protect borrowers' right to choose whichever lenders they wish. They say they are concerned that some colleges are forcing students and parents to borrow from lenders with which the institutions have exclusive arrangements.
Chronicle of Higher Education. 1255 23rd Street NW Suite 700, Washington, DC 20037. Tel: 800-728-2803; e-mail: circulation@chronicle.com; Web site: http://chronicle.com/
Publication Type: Journal Articles; Reports - Descriptive
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Laws, Policies, & Programs: Higher Education Act 1980