Drops Lender Lists
The Johns Hopkins University announced today that it is adopting the code of conduct proposed by the New York attorney general to govern the relationship between universities and student loan companies.
The university also said it has canceled all lists of suggested lenders compiled for students and their families by its various student financial aid offices.
The announcements were included in the university's response to inquires from the office of New York Attorney General Andrew M. Cuomo.
The university and the attorney general were informed April 9 by CIT Group Inc., parent company of Student Loan Xpress Inc., that SLX had paid about $65,000 in tuition for or consulting fees to the director of one of Johns Hopkins' financial aid offices. SLX is listed on some of the university's lender lists.
Johns Hopkins immediately placed the financial aid director, Ellen Frishberg, on administrative leave with pay. Frishberg has headed the office that serves students in the university's schools of Arts and Sciences and Engineering.
Though the university's inquiry is not complete and Frishberg remains on administrative leave, the university has made initial policy decisions regarding future relationships with companies that make loans to students and their families.
"Johns Hopkins is absolutely committed to a financial aid program that serves students' best interests and meets the highest ethical standards," said President William R. Brody. "The actions the university is announcing today are intended to ensure that we meet that commitment."
First, the university has adopted the College Loan Code of Conduct proposed by the attorney general. The code, available online at tinyurl.com/24m5pz, requires, in part, that university employees be prohibited from accepting anything of more than nominal value from lenders.
Second, all seven financial aid offices that serve Johns Hopkins' nine schools and nearly 20,000 students have canceled all lender lists. The university said it would not issue any new lists of loan companies until there is a national consensus on standards for lists that are free of conflict of interest and serve the best interests of students. Johns Hopkins said it would continue to process loans from any lender a student or family chooses.
Johns Hopkins' inquiry to date has found no evidence that any university official was aware of the consulting fees or tuition payments that Student Loan Xpress made to or on behalf of Frishberg from 2002 to 2006, the university said. The university said it has found no evidence to date that any student has been harmed by the inclusion of SLX on its lender lists.
Frishberg had disclosed to the university that she served on an SLX advisory board and that SLX had reimbursed her for expenses related to that service. In a meeting with university attorneys last week, she reported that she had consulted for other companies. The university is now investigating those relationships. Beyond service on advisory boards, the university said it has found no evidence to date that Frishberg had previously alerted Johns Hopkins officials to information that would suggest that her private consulting or other relationships with lenders might cause potential conflicts of interest.
The university said it has found no evidence of any lender payments to Johns Hopkins in return for placement on any lender list or as compensation for loans to Johns Hopkins students.
The university did identify two contracts, one of which ended in 2004, in which a university financial aid office agreed to place a company on a lender list as part of that company's agreement to provide loans to the university's international students. Some lenders, including SLX, have occasionally paid for meals or entertainment for employees of Johns Hopkins financial aid offices at professional conferences or for meals during campus visits, the university said. SLX paid during this academic year for a lender list brochure distributed by one of the university's financial aid offices. The university has discontinued use of that brochure along with all lender lists.
Go to Headlines@HopkinsHome Page