ALBANY, N.Y. – The Association of American Universities has agreed to a set of principles that dictates the relationships between schools, financial aid offices and student lenders.
The organization, made up of 60 U.S. public and private research universities, developed the set of principles after New York Attorney General Andrew Cuomo launched an investigation into questionable college lending practices.
Cuomo has said his investigations have uncovered numerous arrangements that benefited schools and lenders at students’ expense.
The principles, agreed on by the AAU at a meeting this week in Washington and announced Thursday, reaffirm the need for schools to ensure student lenders are selected based on an assessment of student borrowers’ best interests, and that schools should disclose the criteria for recommending lenders.
According to the agreement, schools should inform students and parents they may select the lender of their choice, and should not penalize students for selecting a lender not on a preferred lender list.
The agreement also states that school employees involved in, or responsible for, student financial aid programs shouldn’t accept any personal benefits.
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