IU, other schools cautioned about loan regulations

On June 29, more than 900 colleges and universities, including IU, received a letter from the U.S. Department of Education that cautioned against violating student loan regulations. The letter said IU students must be able to choose their lenders for government-backed student loans.\n“Here at IU ... we are reviewing all of our procedures so we are fully in compliance,” Director of IU Media Relations Larry MacIntyre said. “We believe we are, but we’re double checking to make sure.”\nSallie Mae currently serves as IU’s loan processing agent. In May, the U.S. House of Representatives approved a student-loan reform bill. During that time, colleges and universities were being investigated regarding their treatment of lenders.\nMacIntyre said IU was not involved in illegal activity with Sallie Mae or any other lenders, and that IU received “no money under the table” or “kickbacks.” \nHe said IU chose Sallie Mae because the University determined that Sallie Mae offered the best deal options for student loan opportunities. \nIn May, MacIntyre explained that students are free to go to any lender, and IU will accept that lender. If students were to approach IU to apply for a loan, they would be referred to Sallie Mae only because IU needs a loan agency with which to do business. \nThe legislation passed by the House in May contained an act that would require colleges and universities to develop codes of conduct for student-loan practices. It also barred agreements in which universities receive revenue from student loans, and it authorized the U.S. Department of Education to regulate the loan industry. In addition, it disallows university officials from sitting on loan company advisory boards and bans gifts from lenders to financial-aid officials and their family members. \nMacIntyre said that, despite the “cautioning” from the U.S. Department of Education, IU will continue to make sure their loan practice aids students in the fairest and most facilitative way possible.