1.
Definitions
a.
"Employee" or "School employee" means any employee,
agent, student financial aid contractor, director, officer or trustee of the
School. For purposes of the Code provisions relating to gifts and stock
ownership, this term includes family members of the Employee. For purposes of
Paragraph 2 of this Code, this term includes family members living in the same
household as the Employee.
b.
"School" means all colleges, campuses, departments or
other components of the higher education institution adopting this Code of
Conduct that are either located in Arizona or
that offer on-line classes to Arizona
residents, including alumni associations if the associations are under the
institution’s control and are not separately incorporated.
c.
"Student loan lender" or "lender" means any entity
involved in making, holding, consolidating, originating, servicing or
guaranteeing any loan to students or parents to finance higher education
expenses. This includes lenders who provide private educational loans as well
as lenders who provide loans that are made, insured or guaranteed by the U.S.
Department of Education, except loans under the William D. Ford Direct Loan
Program.
2.
Employee
Compensation Prohibition
No
employee of the School or "school-affiliated organization" (as defined in 34
CFR 682.200(b)(5)(i)(A)(8)) shall accept or solicit anything of other than
nominal value from a student loan lender.
"Nominal
value" means a total retail value of not more than ten dollars ($10.00) as
calculated over a 12-month period, or as defined by a School policy consistent
with applicable federal and state law. This paragraph shall not prohibit School
employees from conducting non-student lending business with any lender or
accepting or soliciting anything of other than nominal value in any activity
unrelated to student loans.
3.
Lender Advisory
Board Restrictions
A
School employee shall not accept any remuneration or reimbursement of expenses
for serving as a member of or otherwise participating on a student loan
lender’s advisory board or committee, consistent with applicable federal
student loan requirements.
4.
Financial
Relationship Prohibition
A
person employed in the financial aid office of the School, or who otherwise has
direct responsibilities with respect to educational loans or other financial
aid, shall:
a. avoid any equity or other interest in
any student loan lender other than a remote interest[1];
b. avoid consulting or similar financial
relationships with student loan lenders, and
c. comply with the School’s Conflict of
Interest Policies and Procedures.
5.
Institutional
Compensation Prohibition
a.
The School will not accept anything of value from a
student loan lender in exchange for any advantage or consideration provided to
the lender related to its education loan activity. This prohibition shall
include, but not be limited to: (1) the School’s receipt from any lender of any
computer hardware for which the School pays below market prices, (2)
preferential rates for, or access to, a lender’s other financial products and
(3) printing costs or services. Notwithstanding anything else in this
paragraph, the School may accept assistance as contemplated by 34 CFR
682.200(b).
b.
The School shall not engage in revenue sharing with a
student loan lender. "Revenue sharing" means any arrangement under which a
student loan lender pays a higher education institution or an affiliated entity
or organization a certain sum, fee or percentage calculated in relationship to
the volume of loans received by the lender from students of the institution.
6.
Preferred Lender
List Requirements
a.
Best Interests of Students Paramount. If the School decides to develop
and/or publish any list of suggested, recommended or preferred student loan
lenders ("preferred lender list" or "lender list"), the School shall develop
and maintain any lender list based solely on the best interests of students and
parent borrowers.
b.
Required Disclosures. The School shall prominently
disclose on all publications of a preferred lender list:
i.
the process and criteria by which the list was
assembled;
ii.
comparative information regarding interest rates and
other benefits offered by the lenders; and
iii.
that borrowers
have the right and ability to select lenders not included on the list.
c.
Prompt Certification of Loans from Any Lender. The
School will timely certify any loan from any lender selected by the borrower
that offers the loan, to the extent consistent with applicable federal student
loan requirements. The School will not cause unnecessary certification delays
for borrowers who use a lender that has not been recommended or suggested by
the School.
d.
Minimum Number of Lenders Required. The School shall
ensure there are at least three (3) student loan lenders named on each
preferred lender list which are not "affiliates" of each other, as described in
34 C.F.R. § 682.212 (h)(3).
e.
Review and Update of Preferred Lender Lists. Preferred
lenders lists must be reviewed and updated at least once a year. When
publishing preferred lender lists, the School shall either rotate or randomize
the list of lenders or list them alphabetically.
f.
Loan Resale. The School shall require that all lenders
on a preferred lender list commit in writing to disclose to the borrower before
a loan agreement is signed whether there is an existing agreement to sell loans
to another lender, and if so, the contact information for the lender who will
be purchasing the borrower’s loan. The School shall inform student and parent
borrowers that lenders can, and do, sell student loans, and encourage borrowers
to contact their lenders for more information. Further, the School may remove a
lender from its preferred lender list if that lender sells loans without
ensuring that the advertised loan terms and benefits are honored with the new
lender.
g.
Different Types of Loans. The School shall not include
a student loan lender on a preferred lender list for one type of loan in
exchange for benefits provided by the lender with respect to a different type
of loan.
7.
Promotion of
Preferred Lenders Prohibited
The
School shall not allow a lender included on a preferred lender list to use the
name, emblem, mascot or logo of the School or other words, pictures, or symbols
readily identified with the School, in the marketing of private educational
loans to the students attending the School that implies the School endorses the
private educational loans offered by the lender.
8.
Master
Promissory Notes
The
School shall inform borrowers of the procedure(s) for completing the Master
Promissory Note or other loan agreement with the lender of the borrower’s
choice, whether or not the lender appears on the School’s preferred lender
list.
9.
Lender
Restriction Prohibition
The
School shall not restrict borrowers to any particular type of lender (e.g., those that process loans
electronically).
10.
School as Lender
If
the School participates in the School as Lender program under 20 U.S.C. §1085(d)(1)(E)
and has an agreement to sell student loans to another lender, it must (a)
disclose the existence of the agreement to the borrower and provide contact
information for the lender who will be purchasing the borrower’s loan and (b)
require that any lender to whom the loans are sold honors the loan terms and
benefits the School advertised to borrowers.
11.
Private Loans a
Last Resort
The
School shall not certify student eligibility for a private educational loan
without first informing the borrower that (a) federal financial assistance
(including grants and loans under Title IV) may be available and (b) federal
loans may provide more advantageous terms to the borrower than private loans.
12.
Opportunity
Loans
a.
The School shall not enter into an opportunity loan
agreement with a student loan lender under which the School provides
concessions or promises to the lender that prejudice other borrowers. An
"opportunity" loan means a student loan provided to borrowers with poor or no
credit history, or who otherwise would not meet the student loan lender’s
eligibility criteria.
b.
The School shall not certify student eligibility for an
opportunity loan made available pursuant to an agreement between the School and
a lender unless (i) the agreement includes the option of short term or partial
loans not to exceed one year and (ii) the School informs the borrower of the
short term or partial loan option, so the borrower can consider different or
less expensive financing if the borrower’s financial condition improves.
13.
Staffing
Assistance from Lenders
The
School shall not request or accept from any lender any assistance with call
center or financial aid office staffing, including in-person school-required
initial or exit counseling, except as permitted by applicable federal student
loan requirements. The School shall ensure that any lender employees on campus
are accurately represented as such and not misidentified as School agents or
employees. While lenders may provide professional development training to
financial aid administrators and participate in financial literacy outreach
activities, lender employees must clearly disclose the name of the entity
preparing any written materials and may not promote the lender’s products.
14.
Implementation
a.
The School agrees to publish the Arizona Student Loan
Code of Conduct prominently on its website within ten business days of its
adoption by the School.
b.
The School shall require all of its employees with
direct responsibilities relating to student loans to obtain training concerning
the Arizona Student Loan Code of Conduct, applicable federal and state student
loan laws and regulations, and related School policies and procedures within 90
days of the date the School adopts this Code or, for new employees, within 90
days of the date of hire. The School shall adopt procedures to ensure these
employees maintain current knowledge of the Code and applicable regulations.