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Code of Conduct for Education Loans

The Higher Education Opportunity Act conditions the eligibility of educational institutions to participate in Title IV programs on the development of and compliance with a code of conduct prohibiting conflicts of interest for its financial aid personnel [HEOA § 487(a)(25)].

  1. Definitions
    1. “Lender”, “guarantor” or “servicer” shall mean
      1. any entity that itself, or through an affiliate, engages in the business of making loans to students, parents or others for the purposed of financing higher education expenses or that securitizes such loans; or
      2. any entity, or association of entities, other than the college or the state or federal government, that guarantees education loans.
    2. “North Central Missouri College (NCMC)” shall mean the college providing post-secondary education that adopts this Code of Conduct.
    3. A “preferred lender” shall mean a lender on a list of preferred lenders or similar rankings or designations.

NCMC employees are required to comply with this code of conduct. The following specific provisions bring NCMC into compliance with the federal law [HEOA § 487(e)].

  1. Neither NCMC as an institution nor any individual employee shall enter into any revenue-sharing arrangements with any lender.
  2. No employee of NCMC who is employed in the Financial Aid Department or who otherwise has responsibilities with respect to education loans, shall solicit or accept any gift from a lender, guarantor, or servicer of education loans. For purposes of this prohibition, the term “gift” means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimus amount.
  3. An employee of NCMC who is employed in the Financial Aid Department or who otherwise has responsibilities with respect to education loans shall not 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.
  4. NCMC shall not:
    1. direct borrowers to or assign, through award packaging or other methods, the borrower’s private (alternative) loan to a particular lender; or
    2. refuse to certify, or delay certification of, any loan based on the borrower’s selection of a particular lender or guaranty agency.
  5. NCMC shall 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 institution providing concessions or promises regarding providing the lender with:
    1. a specified number of loans made, insured, or guaranteed under Title IV;
    2. a specified loan volume of such loans; or
    3. a preferred lender arrangement for such loans.
  6. NCMC shall not request or accept from any lender any assistance with call center staffing or the Financial Aid Department staffing.
  7. Any employee who is employed in the Financial Aid Department, or who otherwise has responsibilities with respect to education loans or other student financial aid, and who serves on an advisory board, commission, or group established by a lender, guarantor, or group of lenders or guarantors, shall be prohibited from receiving anything of value from the lender, guarantor, or group of lenders or guarantors, except that the employee may be reimbursed for reasonable expenses incurred in serving on such advisory board, commission, or group.