Not so sub-prime

August 28, 2008

Georgetown and several other area colleges have agreed to a new Code of Conduct for dealing with student loan lenders. The agreement, put together by the D.C. District Attorney, prohibits universities and their employees from profiting from their dealings with student lenders.

The agreement is the first of its kind for D.C universities and is a response to last year’s investigation by the New York State Attorney General into improper relations between several universities and major lenders.

According to the agreement, employees at university financial aid offices will be prohibited from taking gifts or working for student lenders. Universities will also be barred from accepting money in exchange for preferable treatment and must disclose how their “Preferred Lender Lists” are assembled.

“This new code will assure student borrowers that the best lending practices are followed,” said Leslie Kershaw, a spokesperson for the DA’s office.

The agreement takes effect on September 1.

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