Area schools join lender-relationship agreement

Altogether, 18 schools – including Drury University and Southwest Bible University, which came on board in June – have reached code-of-conduct agreements with Attorney General Jay Nixon regarding their relationships with the student loan industry.

Under the agreements, students who borrow money to attend the schools will have information and protection when choosing an outside lender, according to a news release from Nixon.

The code of conduct came about after Nixon began looking into how students are being steered toward preferred lenders at some schools, without receiving information about how those lenders were chosen or any revenue-sharing agreements they might have with a school, according to the release.

By signing the code, schools agree to:

• Prohibit certain remuneration to the school – specifically through revenue-sharing agreements – and prohibit remuneration to school employees;

• Disclose information to students and their parents about preferred-lender lists;

• Prohibit steering students to certain lenders’ master promissory notes; and

• Limit school employees’ participation on lender advisory boards in exchange for compensation or reimbursements.

The schools also have agreed to cooperate with any investigation by Nixon’s office into lending practices.