Institutional and Employee Relationships with Educational Loan Lenders

Scope

This policy applies to UW institutions and associated affiliated organizations involved in providing educational loans.

Associated affiliated organizations are legally distinct from the University but organized and operated for the benefit and in support of the University and/or conduct activities that advance the mission of the University, and may include alumni organizations, athletic organizations, foundations or social, academic or professional organizations of the institution.

For the purposes of this policy, UW employees are those employees who have responsibility for financial aid and educational loans. The provisions of this policy supplement and do not supersede other applicable state or federal laws and regulations.

Purpose

Students and their families often rely on educational loans to finance a college education. The purpose of this policy is to establish guidelines to prevent conflicts of interest between UW institutions and educational loan lenders.

Policy Statement

UW institutions and employees shall act with integrity, objectivity, due professional care, and transparency in their work with educational loan lenders. UW institutions and employees shall be committed to the highest levels of ethical behavior and professionalism, following professional standards and the ethical requirements of Wis. Stats. § 19.41, et seq., Code of Ethics for Public Officials and Employees; and Chapters UWS 8 and ER-MRS 24, Wis. Adm. Code.

I. Obligations of UW Institutions and Associated Affiliated Organizations

UW institutions and/or associated affiliated organizations may not:
1. Solicit, accept, or enter into any agreement in which an educational loan lender provides fees, revenue sharing, or material benefits to the UW institution in exchange for the institution or its employees recommending a lender or its loan products.
2. Enter into an agreement with an educational loan lender for, or solicit or accept from an educational loan lender, any funds that would be allocated or used for opportunity pool loans or any similar arrangement.
3. Request or accept from any lender any offer of funds to be used in exchange for providing concessions or promises to provide the lender with a specified number of educational loans, a specified loan volume of such loans, or a lender arrangement for such loans.
4. Solicit or accept assistance for call center or financial aid staffing from an educational loan lender.
5. Assign, through award packaging or other methods, a first-time borrower’s loan to a particular lender.
6. Refuse to certify, or delay certification of, any loan based on the borrower’s selection of a particular lender or guaranty agency.
Notwithstanding any other provisions of this policy or the law, UW institutions and/or associated affiliated organizations may accept any of the following from educational loan lenders:
1. Counseling and educational materials for use by students and their families regarding student lending laws, education loans, financial literacy, debt management and other topics relevant to providing students and their families with financial aid assistance; any such materials must clearly disclose the source of said materials and may not use trademarks, logos, mascots or other symbols associated with the UW institution that would suggest any UW institutional endorsement of the lender or product;
2. Training to UW employees regarding student lending laws, education loans, financial literacy, debt management and other topics relevant to student financial aid; and
3. Assistance in the same manner that the U.S. Department of Education may assist UW institutions and employees under the Department’s Direct Loan Program.
UW institutions shall inform students who apply for financial aid that:
1. The student may use any eligible lender to acquire an educational loan.
2. Federal loans may be available. UW institutions shall encourage students to evaluate available federal loans, which are guaranteed, regulated, and may be more advantageous than private loans, before pursuing private or alternative loans. If the institution provides information regarding a private educational loan to prospective borrowers, the institution shall, as required by law, concurrently provide the borrower with information regarding the William D. Ford Direct Loan Program as provided under Part D of title IV of the Higher Education Act.
Any UW institution may maintain a lender list as allowed by law. A lender list is a list of specific lenders of private educational loans that the institution recommends, promotes or endorses in any manner. Any lender list or other arrangement with a UW institution or an associated affiliated organization shall be developed without prejudice and for the sole benefit of the institution’s students and families. Institutions may not deny, delay, or otherwise impede a student’s choice of lenders to those lenders with which the institution or an associated affiliated organization has a lender arrangement or lenders included on the institution’s lender list. Requirements include, but are not limited to the following:
1. For institutions that establish a lender list, the institution shall:
  1. Include no fewer than two legally separate private lenders on the list.
  2. Annually compile, maintain, and make the preferred lender list available for students and their families. The institution shall publish the list in print or in another medium.
  3. Prominently disclose on the preferred lender list all information required by law for preferred lender lists including:
    - Not less than the information required to be disclosed under section 153(a)(2)(A) of the Higher Education Act.
    - A description of why the institution participates in a lender arrangement with each lender on the list, particularly with respect to any terms and conditions favorable to the borrower.
    - A statement that the student or the student’s family does not have to borrow from a lender on the list.
    - Whether each lender is associated with another lender on the list. If a lender is an associate of another lender, the list must describe the association.
    - The method and criteria used by the institution in selecting lenders. The criteria shall demonstrate that the institution selected each lender based on criteria that are in the best interests of the borrowers, such as availability of highly competitive interest rates, high-quality servicing of loans, or other terms and conditions that benefit the borrower.
    - Any other disclosure requirement required under federal law or guidance.
2. The institution and any associated affiliated organization that has entered into a lender agreement must additionally disclose on the institution’s website and in other informational materials the following information for each private loan included in the agreement:
  - The maximum amount of federal student aid grant and loan aid available to students.
  - Truth in Lending information (15 USC 1638(e)(11)).
  - Information identified on any model disclosure form developed by the Department of Education pursuant to section 153(a)(2)(B) of the Higher Education Act.
3. An institution or associated affiliated organization that participates in a lender arrangement may not agree to allow the lender to use the name, emblem, mascot, or logo of the institution or organization, or other words, pictures, or symbols readily identified with the institution or organization in marketing the loans to students in any way that implies that the loan is offered or made by the institution or organization instead of the lender.
UW institutions shall inform UW employees with responsibilities for educational loans of the provisions of the institutional code of conduct, this policy, as well as applicable state ethics codes and related state and federal laws and regulations related to educational loans on an annual basis.
UW institutions shall, prominently on the institution’s website, inform the general public about this policy.
Any associated affiliated organization that participates in a lender arrangement shall comply with the code of conduct applicable to the UW institution with which the organization is affiliated, shall publish the code of conduct prominently on the organization’s website, and shall require all associated affiliated employees with responsibilities for educational loans to be annually informed of the code of conduct.

II. Obligations of UW Employees

UW employees responsible for financial aid and educational loans:

May not solicit, accept, or enter into any agreement in violation of this policy, and may not engage in conduct that violates the conflict of interest and ethical standards of Wis. Stats. § 19.41, et seq., Code of Ethics for Public Officials and Employees; or of UWS 8, Unclassified Staff Code of Ethics, or ER-MRS 24, Wis. Admin. Code, Code of Ethics.
May, in order to improve service to students, participate on an advisory council, commission or group established by an educational loan lender, guarantor, or group of lenders or guarantors, but may not receive compensation or reimbursement for their participation.
May not solicit or accept any gift from a lender, guarantor, or servicer of an educational loan. Gifts for the purposes of this policy means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimis amount. Gifts include a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred. Gifts to family members or gifts given to other individuals based on that individual’s relationship with the employee are also prohibited if the gift is given with the knowledge and acquiescence of the employee and the employee has reason to believe the gift was given because of the employee’s official position.
May 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 with a lender or on behalf of a lender to provide services related to educational loans.

Oversight, Roles, and Responsibilities

UW System Administration’s Office of Financial Aid Administration shall provide oversight and guidance to ensure institutional compliance with this policy.

UW Chancellors shall ensure each institution establishes policies and procedures to comply with this policy, including publishing and enforcing a code of conduct that reflects the provisions of this policy and federal law.

Related Regent Policies and Applicable Laws

Regent Policy Document 20-22, “Code of Ethics”
Wis. Stats. § 19.41, et seq., Code of Ethics for Public Officials and Employees
UWS 8, Wis. Adm. Code, Unclassified Staff Code of Ethics
ER-MRS 24, Wis. Adm. Code, Code of Ethics
12 CFR Subpart F, Special Rules for Private Education Loans
15 USC 1638(e)(11), Duties of Lenders Participating in Preferred Lender Arrangements
20 USC 1019a, Responsibilities of covered institutions, institution-affiliated organizations and lenders
20 USC 1019b, Loan information to be disclosed and model disclosure form for covered institutions, institution-affiliated organizations, and lenders participating in preferred lender arrangements
34 CFR 601, Institution and Lender Requirements Relating to Education Loans

History: Res. 9356, adopted 05/11/2007, directed the development of a Board of Regents policy. Res. 9360, adopted 06/08/2007, created Regent Policy Document 13-4. Res. 10835, adopted 03/09/2017, authorized technical corrections. Res. 11607, adopted 04/09/2021, amended RPD 13-4.

Regent Policy Document 13-4