Student Aid in Trouble

I've been sort of ignoring this story because it is so awful and so obvious: the idea that colleges and universities have been colluding with loan companies, sacrificing the trust of families and students, and not providing the most favorable financial alternatives for their students is just beyond my comprehension. Andrew Cuomo is unearthing the relationships in New York and already some colleges have come forward and are rectifying their procedures.

Today I read on the Higher Ed Watch Blog of the New America Foundation a report that, if true, is stunning. The blog reports the a University of Texas Student newspaper has found evidence regarding preferred lenders that does more than suggest that the institution selected lenders based on the perks it, the institution received, from the lender. These perks consist of meals, gifts, and other forms of "marketing." This was not an informal system of rewards, according to the blog. The UT Office of Student Financial Services maintained a list of "lender treats" and rated the lendor based in part on the number of treats it received.

Maybe this can be seen as business as usual but in non-profits it is not Business as Usual. There seems to be evidence that a lender who offered O% interest loans to students but did not market itself aggressively to UT might have been taken off the list. If these allegations are true, the implications are horrific. Consider: the financial aid officers who parents and students assume are working on their behalf are, in fact, pitching for the other team. It is like when you find out the realtor at the open house is working for the seller: except that that is common knowledge and the broker is compelled to explain the relationship to you as the buyer. Not so the financial aid advisor, who is busy munching on his or her free sandwich.

Something went horriby wrong. I don't think there is any singlemost more important stressor facing families of the college-bound today than expenses associated with higher education. It is reprehensible that there is even an inkling of impropriety let alone actually standing in the way of students getting the most help they possible can. Heads should roll. Non-profits are a public trust. That trust has been abused wherever the lenders have been preferred over the students.

For those of us in communications—sometimes called public relations or marketing—who are often fighting connotations of the evils of Madison Avenue or accusations that we are bringing an unauthenticity to the halls of academe, it is ironic that the real scam may be in financial aid.