JEFFERSON CITY, Mo.
Eleven public and private colleges in Missouri have agreed to a code of conduct regarding student loans, Attorney General Jay Nixon said Wednesday.
Nixon reached a similar agreement in April with Washington University in St. Louis and says more schools could follow. The University of Missouri’s four-campus system has not signed on yet, but his office said it’s working with all schools around the state.
The agreements follow a national look led by New York Attorney General Andrew Cuomo into loan arrangements that he says favored banks and schools over students.
The idea of the code is to protect students from kickbacks lenders pay to colleges in exchange for steering students their way.
“Students and their families may feel unempowered as consumers, particularly if they are steered to certain lenders without receiving enough information to make the choices that are most appropriate,” Nixon said in a written statement.
Under the code, schools are to end or avoid revenue-sharing agreements with lenders and bar employees from being paid by lenders.
Washington University ended a revenue-sharing agreement with Education Finance Partners of California in 2006 that would have provided money for the university if it led more students to the company, Nixon said. The university said it never received payments.
Nixon’s office said none of the latest 11 schools to sign on to the code had revenue-sharing agreements.
The code also prevents schools from preselecting particular lenders on loan paperwork, leaving it to students to decide, and bars college employees from being paid to serve on lenders’ advisory boards. Schools must spell out how they create “preferred lender” lists. Starting Aug. 1, lenders also are not allowed on such lists at affected schools unless they too agree to a code of conduct with the attorney general.
The University of Central Missouri, in Warrensburg, said it’s already following the principles in its agreement with Nixon, so it shouldn’t have to make changes.
“We have never had a preferred lender list or any type of revenue-sharing arrangements with lenders,” university spokesman Jeff Murphy said. “We will keep doing what we have done in the past.”
The other schools to adopt the code are Avila University in Kansas City; Drury University in Springfield; Hannibal-LaGrange College in Hannibal; Mineral Area College in Park Hills; Missouri Valley College in Marshall; Northwest Missouri State University in Maryville; Park University in Parkville; Southwest Baptist University in Bolivar; State Fair Community College in Sedalia; and Three Rivers Community College in Poplar Bluff. Collectively those 11 schools account for about 49,000 students, Nixon said.
By comparison, the four-campus University of Missouri system has nearly 63,800 students.
– Associated Press
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