Congress enacts sweeping changes in financial aid
"Private lenders were utilizing practices that were not to student's best interests. There were various instances of cases of certain individuals and lenders seeking out personal gain over their professional duties," she said.
Reynolds emphasized that relationships between lending companies and schools had become conflicts of interest that potentially endangered students' ability to get a fair deal for their college funding.
She stressed that this legislation was "emergency action" to prevent further conflicts of interest, and that Attorney General Cuomo had been one of the leaders in persuading Congress to take initiative.
Prompted by New York residents who were concerned about the student loan practices in their state, Cuomo instigated a nation-wide investigation into loan practices, which Hopkins was quickly pulled in to.
Reynolds explained that students believed the preferred lenders lists were compiled because the lenders offered the best packages and rates available, but that this was in fact not necessarily true.
"They were on the list for other reasons, and this is why Congress got involved. There were these conflicts of interest existing within the system, and many smaller lenders - which could have offered better rates - were being shut out."
According to William Conley, the dean of Enrollment and Academic Services, Hopkins's decision to cease use of such a list has made it harder for the University to help students make a good decision about college financing.
"These lists had a history of providing good rates for our students and made it much easier to find a lender. Without a lender list, it's very difficult to help advise students about financing - there is so much out there, so where do you start?"
He reiterated that Dr. Frischberg's actions, which centered on her position on an advisory board for the private lending company Student Loan Xpress, had caused "no material harm to students," but that this appearance of a conflict of interest - she had received tens of thousands of dollars worth of goods and services from a company at the top of the lending list - had led to the attorney general's inquiry and her subsequent resignation.
Reynolds emphasized that relationships between lending companies and schools had become conflicts of interest that potentially endangered students' ability to get a fair deal for their college funding.
She stressed that this legislation was "emergency action" to prevent further conflicts of interest, and that Attorney General Cuomo had been one of the leaders in persuading Congress to take initiative.
Prompted by New York residents who were concerned about the student loan practices in their state, Cuomo instigated a nation-wide investigation into loan practices, which Hopkins was quickly pulled in to.
Reynolds explained that students believed the preferred lenders lists were compiled because the lenders offered the best packages and rates available, but that this was in fact not necessarily true.
"They were on the list for other reasons, and this is why Congress got involved. There were these conflicts of interest existing within the system, and many smaller lenders - which could have offered better rates - were being shut out."
According to William Conley, the dean of Enrollment and Academic Services, Hopkins's decision to cease use of such a list has made it harder for the University to help students make a good decision about college financing.
"These lists had a history of providing good rates for our students and made it much easier to find a lender. Without a lender list, it's very difficult to help advise students about financing - there is so much out there, so where do you start?"
He reiterated that Dr. Frischberg's actions, which centered on her position on an advisory board for the private lending company Student Loan Xpress, had caused "no material harm to students," but that this appearance of a conflict of interest - she had received tens of thousands of dollars worth of goods and services from a company at the top of the lending list - had led to the attorney general's inquiry and her subsequent resignation.
Viewing Comments 1 - 3 of 3
credit card merchant account
posted 2/19/09 @ 2:05 PM EST
Frankly, it doesn't really surprise me. This kind of attitude is the most frequent one. I believe that it will take a long time to these people to realize that what they are doing isn't right at all. (Continued…)
Anna Reed
posted 3/11/09 @ 4:10 AM EST
That looks like lots of fun. When I was in college we didn't had so many fun activities.
Susan Goatman
posted 3/15/09 @ 3:00 AM EST
Thank you for writing the article, I am very pleased with how it came out.
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