This week we have several reports out that financial aid officers at some leading colleges have personal investments in their colleges preferred lender program. These reports are coming out after the New York Attorney General began an investigation into some of the financial aid practices of some colleges in this country. The Barber Law Firm recounts how the New York Times is reporting this week that the financial aid directors at Columbia University, the University of Texas at Austin and the University of Southern California held shares in Student Loan Xpress which is a preferred lender at all three colleges. Even if we assume that the investments by these financial aid directors is simply an investment the appearance of improper dealings is hard to argue against. On the other end of the spectrum, to what extent did these directors take advantage of their students by recommending a lender that they had an interest in?
The world of financial aid is complex enough without students having to worry about whether they are being ripped off by the very people who are deciding how much loan burden they will have to carry.