Missouri colleges sign student loan conduct code

The agreements, covering more than 49,000 students at schools including Drury University in Springfield, follow concerns from Nixon and other state attorneys general that students are being steered by universities toward “preferred lenders” without proper information about how those institutions are chosen.

The new codes of conduct include:

• a prohibition on certain payments to the schools and their employees, specifically through revenue-sharing agreements;

• required disclosures related to preferred lending lists, including information for students and parents about how those lists are formulated;

• a prohibition on steering students to certain lenders’ master promissory notes; and

• a limitation on school employees’ participation on lender advisory boards in exchange for compensation or reimbursement of any expenses.

“The loan process can be intimidating, especially in preparing for the first year,” Nixon said in the release. “Students and their families may feel unempowered as consumers, particularly if they are steered to certain lenders without receiving enough information to make the choices that are most appropriate.”

Nixon is also one of 32 attorneys general who sent a letter to the U.S. Senate urging it to pass the Student Loan Sunshine Act to safeguard students and families from deceptive practices in the college loan industry.