A group representing financial aid workers at nearly 3,000 colleges and universities is developing a code of conduct amid harsh criticisms of the student loan industry, a top student aid professional said Thursday.
Details of the new code are not available because the group's board has not yet approved it, said Janet Dodson, chairwoman of the National Association of Student Financial Aid Administrators.
Dodson would not say whether the code was similar to a code written by New York Attorney General Andrew Cuomo, who is investigating the $85 billion college loan industry.
Twenty-two colleges have accepted Cuomo's code of conduct, which provides a framework for dealings between lenders and schools. Eight schools have agreed to reimburse students more than $3 million in funds that they received from lenders. Some lenders have also agreed to changes, and paid a combined $6.5 million into a national fund to educate students and families about student loans.
Dodson spoke on a panel Thursday before the Coordinating Commission for Postsecondary Education, a state agency that oversees Nebraska's colleges.
The panel included the chief financial officer of Lincoln-based loan company Nelnet, which disclosed in April that it paid Western Illinois University for referring students to the company, and also sent plane tickets to financial aid officers from a New York school.
Nelnet adopted a code of conduct and agreed to change its practices by August 15.
"We believe these reviews give us an opportunity to look at how we conduct business and, more importantly, at how those business practices are perceived in the marketplace," said Nelnet CFO Terry Heimes. "We're taking the necessary steps to align our business practices with our code of conduct."
Heimes said the company would cooperate with ongoing inquiries.
Mary Sommers, president of the Nebraska Association of Student Financial Aid Administrators, defended the practices of the majority of school loan officers. Several loan officials have been put on leave for accepting gifts or owning stock in various loan companies.
"I think that the competition has gotten so fervent that, as a result, everybody's looking for schools and students to lend money to," Sommers said.