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The newspaper of The Johns Hopkins University June 25, 2007 | Vol. 36 No. 38
Hopkins, N.Y. Attorney General Reach Agreement

Steps to be taken to ensure compliance with code of conduct on student loans

By Dennis O'Shea

The Johns Hopkins University announced last week an agreement with the New York attorney general formalizing adoption of a new code of conduct on student loans and resolving New York's investigation of the university.

As part of the agreement, Johns Hopkins specifically denied that the university has violated New York law. It agreed to take steps to ensure compliance of all Johns Hopkins financial aid staff with the requirements of the code. It also agreed to provide a report on its student lending practices to the attorneys general of New York and Maryland each year for five years.

The university agreed to make a $562,500 contribution to New York Attorney General Andrew M. Cuomo's national fund for educating students and families about the financial aid process. Johns Hopkins, under a program to be approved by Maryland Attorney General Douglas F. Gansler, will spend the same amount to educate, assist and benefit Maryland high school students and their parents.

"Although it is clear that one university employee violated university policy in her relationships with student loan companies, Johns Hopkins as an institution has always stood for a financial aid program that meets the highest ethical standards," President William R. Brody said.

Brody said that reaching an agreement with Cuomo allows the university to avoid lengthy, expensive litigation. He said that Johns Hopkins appreciates Gansler's willingness to review and approve the program to benefit Maryland students.

"The university has reached this agreement," Brody said, "so that we can focus on what is truly important: ensuring that our financial aid program operates in the best interest of students. Our commitment today to our students and their families is to redouble our efforts to ensure that it does just that."

The agreement includes provisions requiring financial aid officers to attend annual training, certify annually that they are adhering to the code of conduct, and disclose any offers of anything of value they receive from a student loan company. It also sets general standards for the creation and composition of any lists of recommended private lenders that the university may issue.

The agreement resolves an investigation of Johns Hopkins that began April 9, when the university learned that Student Loan Xpress had paid about $65,000 in tuition for or consulting fees to Ellen Frishberg, the director of one of Johns Hopkins' seven financial aid offices. The payments, made from 2002 to 2006, had never been disclosed to Johns Hopkins, a violation of the university's conflict-of-interest policies. SLX was on lists of recommended lenders issued by Frishberg's office during those years.

Early in the investigation, Johns Hopkins canceled all lists of suggested lenders issued by any of its seven financial aid offices. The university said it would not consider issuing any new recommendations until a national consensus is forged on ethical standards. The university announced on April 25 that it was voluntarily adopting the code of conduct proposed by Cuomo, an adoption formalized by the June 14 agreement.

During the investigation, Johns Hopkins learned and disclosed to Cuomo's office that Frishberg had also maintained a consulting relationship prior to 2002 with another lender, American Express. Frishberg received payments from American Express during times when her office recommended American Express as a lender. Frishberg had not disclosed this relationship at the time in a manner consistent with the university's conflict-of-interest policy.

Frishberg was placed on administrative leave April 9 and resigned May 18. The university said it found no evidence that any student or parent borrower was harmed financially because of any arrangement between Frishberg and a lender. The university also said it has had no revenue-sharing arrangements with lenders.

The text of the agreement between the university and the New York attorney general is available at


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