Roundup: Week of May 28 – June 1

NASFAA Agrees to Cuomo’s Code of Conduct

The National Association of Student Financial Aid Administrators announced on Thursday that it has agreed to adopt New York State Attorney General Andrew Cuomo’s “Code of Conduct” as part of its ethics policy and to prevent lenders from using the group’s annual conference as a promotional vehicle to woo financial-aid administrators. The group’s decision, which Higher Ed Watch applauds, represents an about face for the organization whose president, Dallas Martin, had initially demanded an apology from Mr. Cuomo for engaging in “unwarranted character assassination.” At a news conference with Mr. Cuomo, Mr. Martin apologized to the attorney general for his initial reaction. “I was wrong,” he said. “We didn’t have all the facts.” Under the agreement, the association would prohibit all prize drawings by lenders and other exhibitors; ban any social activities directed toward conference attendees that are sponsored by loan providers; eliminate named sponsorship of specific conference activities and events; and terminate the NASFAA scholarship program, which has been financed by lenders. To ensure compliance with these policies, a member of the NY State Attorney General’s Office will be invited to attend and monitor the annual conference for the next five years. In addition, the group invited Mr. Cuomo to be the keynote speaker at this year’s conference.

Columbia U. Reaches Agreement With N.Y. State Attorney General

Columbia University announced on Thursday that it had reached its own agreement with Mr. Cuomo, in which the institution pledged to contribute $1.125-million to a national fund that the N.Y. Attorney General has set up for educating students and their parents about the financial aid process. Under the deal, Columbia also agreed to allow Mr. Cuomo’s office to monitor its financial aid office for the next five years. Columbia made the deal a week after it fired its aid director, David Charlow, for conflict of interest violations, as he had owned more than $100,000 in stock from the former parent company of Student Loan Xpress a fact first uncovered by a Higher Ed Watch investigation. In a statement, Columbia said that it “does not admit, and expressly denies, that it has violated any law in connection with its student loan practices.” As to why it agreed to the deal, the university stated that “a longtime, well-regarded employee failed to uphold the trust that had been placed in him by the university,” and that it wanted to “make this kind of conduct a thing of the past.” Mr. Cuomo said that Columbia had not “properly police[d] its employee” and that he is considering bringing criminal charges against Mr. Charlow, who he believes acted illegally in steering students to a lender in which he had a significant financial interest. Meanwhile, the University of Southern California announced on Thursday that its financial aid director, who Higher Ed Watch had also found to have owned stock in the former parent company of Student Loan Xpress, had retired. The university said that it was continuing to investigate actions taken by Catherine Thomas — which it said were “inconsistent with USC’s conflict of interest policy.”

Dodd to Hold Hearing Next Week on Private Loans

Sen. Chris Dodd (D-CT), chairman of the Senate Banking Committee and a Democratic Presidential candidate, is planning to hold a hearing on Wednesday on the extraordinary growth of the private student loan marketplace. Witnesses are yet to be announced for what is to be the first Congressional hearing focused on private loans. Mr. Dodd said that the hearing would also deal with “the recently announced sale of lending giant Sallie Mae.”

Former Princeton U. Lobbyist Nominated for Top Higher Ed Job at Education Department

President Bush has nominated Diane Auer Jones, who served as Princeton University’s chief lobbyist for three years starting in 2002, to be the next assistant secretary for postsecondary education, the government top higher-education policy maker. If confirmed, as expected, she will replace Sally Stroup, who left the Department over a year ago to take a key staff position on the House education committee. Ms. Stroup’s tenure has come under criticism lately for her failure to crack down on questionable practices undertaken by private lenders to win student-loan business.