Financial Aid Code of Conduct
Code of Conduct
Upper Iowa University
July 2008
As required by Iowa Code Chapter 261 F (HF 2690) Upper Iowa University adopts the following Code of Conduct for financial aid professionals, and for persons with direct responsibility for educational loans.
NASFAA Statement of Ethical Principles
Upper Iowa University incorporates into its Code of Conduct the following principles and standards that are primarily based on the National Association of Student Federal Aid Administrator’s (NASFAA) Statement of Ethical Principles and Code of Conduct and Iowa Code Chapter 261F. This Code of Conduct is applicable to those employees of UIU who are employed in the Financial Aid Office or who otherwise have direct responsibilities with respect to educational loans at UIU.
NASFAA’s Statement of Ethical Principles provides that the primary goal of the financial aid professional is to help students achieve their educational potential by providing appropriate financial resources. To this end, this statement provides that the financial aid professional shall:
- Be committed to removing financial barriers for those who wish to pursue postsecondary learning.
- Make every effort to assist students with financial need.
- Be aware of the issues affecting students and advocate their interests at the institutional, state and federal levels.
- Support efforts to encourage students, as early as the elementary grades, to aspire to and plan for education beyond high school.
- Educate students and families through quality consumer information.
- Respect the dignity and protect the privacy of students, and ensure the confidentiality of student records and personal circumstances.
- Ensure equity by applying all need analysis formulas consistently across the institution’s full population of student financial aid applicants.
- Provide services that do not discriminate on the basis of race, gender, ethnicity, sexual orientation, religion, disability, age or economic status.
- Recognize the need for professional development and continuing education opportunities.
- Promote the free expression of ideas and opinions, and foster respect for the diverse viewpoints within the profession.
- Commit to the highest level of ethical behavior and refrain from conflict of interest or the perception thereof.
- Maintain the highest level of professionalism, reflecting a commitment to the goals of the National Association of Student Financial Aid Administrators.
Introduction
Iowa Code Section 261F.2 requires Upper Iowa University to develop, administer, and enforce a code of conduct governing educational loan activities. Educational loan activities are those associated with any loan made, insured, or guaranteed under Title IV of the Higher Education Act (i.e., loans made under the Federal Family Education Loan Program, Federal Direct Loan Program, or Perkins Loan Program), or any private educational loan. A private educational loan is any loan that is not made, insured, or guaranteed under Title IV of the Higher Education Act and is issued to a borrower solely for postsecondary educational expenses. Private educational loans secured by a dwelling or under an open-end credit plan (e.g., a home equity line of credit, or open line of credit tied to a Certificate of Deposit) are exempted from the definition of private educational loan.
All of the following individuals or entities associated with Upper Iowa University must comply with this code of conduct governing educational loan activities:
- An employee
- A contract employee
- A director or officer
- A trustee
- An agent – including an alumni association, booster club, or other organization directly or indirectly associated with or authorized or employed by Upper Iowa University.
Iowa Code Sections 261F.2(1) and 261F.1(2) and (3)
An organization that is affiliated with Upper Iowa University must comply with certain aspects of the code of conduct, as identified below. An affiliated organization, as defined by federal regulations, is similar to – but not exactly the same as – an agent as defined under Iowa Code. An organization is affiliated with Upper Iowa University if it is directly or indirectly related to Upper Iowa University and includes, but is not limited to, alumni organizations, foundations, athletic organizations, and social, academic, and professional organizations and others that provide financial and vocational services to Upper Iowa University’s students, employees or alumni. An organization does not need to be dependent on Upper Iowa University to be affiliated.
34 CFR 682.200(b)(5)(iii); November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61979
This code of conduct must be published prominently on Upper Iowa University’s internet site, www.uiu.edu.
Iowa Code Section 261F.2(1)(b)
Upper Iowa University’s code of conduct also addresses inducement regulations promulgated by the U.S. Department of Education (USDE) in 34 CFR 682.200(b)(5) and 34 CFR 682.401(e). These regulations set forth standards for relationships between colleges and universities, their affiliated organizations, and FFELP lenders and guarantors.
Gifts
Impermissible Activities
An officer, employee, or agent of Upper Iowa University who is employed in the institution’s financial aid office or who otherwise has direct responsibilities with respect to federal and private educational loans must not solicit or accept any gift from a private or FFELP educational loan lender, lender servicer, or guarantor.
Gifts to Family Members or Others
A gift to a family member of an Upper Iowa University officer, employee, or agent, or a gift to an individual based on that individuals’ relationship with an officer, employee, or agent of Upper Iowa University is not permissible if either of the following applies:
- The gift is given with the knowledge and acquiescence of the institution’s officer, employee, or agent, or
- The officer, employee, or agent has reason to believe the gift was given because of that person’s official position with the institution.
Gift Definition
A gift means any gratuity, favor, discount, entertainment (including expenses for shows, sporting events, or alcoholic beverages), hospitality (including private parties of select training or conference attendees), loan, or other item having a monetary value of more than a nominal amount1. A gift includes services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred.
Iowa Code Sections 261F.1(5) and 261F.3(1) and (2); 34 CFR 682.200(b)(5)(i)(A)(8); 34 CFR 682.401(e)(1)(i)(D); November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61981
Permissible Activities
Upper Iowa University, an Upper Iowa University employee, and a member of an organization affiliated with Upper Iowa University may accept items of a nominal1 value from a private or FFELP educational loan lender, lender servicer, or guarantor that are offered as a form of generalized marketing or advertising or to create good will.
Examples of permissible gifts include, but are not limited to, the following:
- Pens or pencils
- Notepads
- Sticky-notes
- Rulers
- Calculators
- Small tote bags
- Other individual office supply items
1A “nominal” amount is undefined in Iowa Code and the USDE’s inducement regulations. Employees of state agencies should consult their personnel policies for additional restrictions on the acceptance of gifts.
An employee of Upper Iowa University may also accept items of value from a lender, lender servicer, or guarantor that is also offered to the general public.
Iowa Code Section 261F.1(5)(l) and (m); 34 CFR 682.200(b)(5)(ii)(J); 34 CFR 682.401(e)(2)(ix)
Philanthropic Gifts/Contributions to the Institution
Impermissible Activities
Upper Iowa University must not accept philanthropic contributions from a lender, lender servicer, or guarantor that are related to the educational loans provided by the lender, lender servicer, or guarantor to Upper Iowa University. In addition:
- Upper Iowa University or its affiliated organization(s) must not accept scholarships or grants from a FFELP lender or guarantor in exchange for FFELP loan applications or application referrals, a specified volume or dollar amount of FFELP loans made or guaranteed, or placement of a lender on the institution’s FFELP preferred lender list (PLL).
- Upper Iowa University or its affiliated organization(s) must not accept financial aid funds under any Title IV, State, or private program from a guarantor based on an agreement to use the guarantee agency for processing loans, or to provide a specified volume of loans using the agency’s guarantee.
Iowa Code Section 261F.1(5)(d); 34 CFR 682.200(b)(5)(i)(A)(9); 34 CFR 682.401(e)(1)(i)(E)
Permissible Activities
Upper Iowa University may accept philanthropic contributions from a lender, lender servicer, or a guarantor that are not related to the educational loans provided by the lender or guarantor. However, Upper Iowa University must report philanthropic contributions made by a lender with whom we have a preferred lending arrangement to the Iowa Attorney General. (The process for this disclosure will be developed by the Iowa Attorney General in administrative rules.)
Iowa Code Sections 261F.1(5)(d) and 261F.4(6); November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61976
Advisory Councils
Impermissible Activities
An officer, employee, or agent who is employed in Upper Iowa University’s financial aid office, or who otherwise has direct responsibilities with respect to educational loans, must not serve on or otherwise participate in a private lender’s or a private lender affiliate’s advisory council.
Iowa Code Section 261F.3(6)
No employee of Upper Iowa University or member of an organization that is affiliated with Upper Iowa University may serve on a FFELP lender’s advisory council.
November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61980
Permissible Activities
An employee of Upper Iowa University, including a financial aid office employee, may serve on an official, standing advisory council for a FFELP guarantor, including an Iowa College Student Aid Commission advisory council or task force.
An employee or agent of Upper Iowa University may respond to a lender who seeks advice from the institution or groups of institutions by telephone, electronically, or in a meeting, about improving products or services for borrowers. However, Upper Iowa University may not accept any gift or compensation for responding including, but not limited to, transportation, lodging, or related expenses.
Iowa Code Section 261F.3(6); 34 CFR 682.401(e)(2)(vi); November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61980
Boards of Directors
Impermissible Activities
Lender, Lender Servicer, and Guarantor
An officer, employee, or agent of Upper Iowa University who is employed in the financial aid office must not serve on or otherwise participate in a lender’s, lender servicer’s, or guarantor’s board of directors. Service on the Iowa College Student Aid Commission’s Board of Directors is exempted from this prohibition.
An officer, employee, or agent of Upper Iowa University who is not employed in the financial aid office but who has direct responsibility with respect to educational loans must not serve on or otherwise participate in a lender’s, lender servicer’s, or guarantor’s board of directors, unless Upper Iowa University has a written conflict of interest policy. Service on the Iowa College Student Aid Commission’s Board of Directors is exempted from this prohibition.
Upper Iowa University has a written conflict of interest policy for this purpose. See below under “Permissible Activities” for more information about the content of that policy.
Iowa Code Sections 261F.3(7)(a)(1) and (2) and 261F.2(3)
Institutional Boards of Directors or Trustees
No officer, employee, or agent of a lender, lender servicer, or guarantor may serve on Upper Iowa University’s board of directors or trustees, unless Upper Iowa University has a written conflict of interest policy. Service by an employee or member of the Iowa College Student Aid Commission is exempted from this prohibition. See below under “Permissible Activities” for more information about the content of that policy.
Iowa Code Sections 261F.3(7)(a)(3) and 261F.2(3)
Permissible Activities
Lender, Lender Servicer, and Guarantor
Any Upper Iowa University officer, employee, or agent may serve with compensation, and with no restriction, on the Iowa College Student Aid Commission’s board of directors.
Any officer, employee, or agent of Upper Iowa University may serve on a lender’s board of directors if required by law.
An officer, employee, or agent of Upper Iowa University who is not employed in the financial aid office and who has no direct responsibility with respect to educational loans may serve with compensation on a lender’s or lender servicer’s board of directors, or on the board of directors of a guarantor other than the Iowa College Student Aid Commission.
An officer, employee, or agent of Upper Iowa University who is not employed in the financial aid office but who has direct responsibility with respect to educational loans may serve with compensation on a lender’s or lender servicer’s board of directors, or on the board of directors of a guarantor other than the Iowa College Student Aid Commission, if Upper Iowa University has a written conflict of interest policy. Upper Iowa University’s conflict of interest policy MUST specify that an officer or agent who is serving on such a board of directors must recuse himself from participating in any decision of the board with respect to any transaction regarding educational loans.
Iowa Code Sections 261F.2(3), 261F.3(6), 261F.3(7)(a)(1), 261F.3(7)(a)(2)
Institutional Board of Directors and Trustees
Upper Iowa University may permit an employee or member of the board of directors of the Iowa College Student Aid Commission to serve on our board of directors or trustees without restriction.
Upper Iowa University may permit an officer, employee, or agent of a lender or lender servicer, or a guarantor other than the Iowa College Student Aid Commission, to serve as a member of our board of directors or trustees if Upper Iowa University has a written conflict of interest policy. Upper Iowa University’s conflict of interest policy includes both of the following:
- Procedures to be followed when such a member’s personal or business interests in educational loans may be advanced by an action of the board of directors or trustees, and
- A prohibition against the participation of such a member in any decision to approve any transaction where such conflicting interests may be advanced.
Iowa Code Sections 261F.3(7)(a)(3), and 261F.2(3)
Bundling of Private Loans
Impermissible Activities
Upper Iowa University will not bundle (i.e., “package”) private educational loans in a student’s financial aid award, except under certain conditions. See the “Exclusive List of Permissible Activities” below for more information about acceptable conditions for private loan bundling.
Iowa Code Section 261F.5(2)
Permissible Activities
Upper Iowa University may bundle (i.e., “package”) private educational loans in a student’s financial aid award under any one of the following conditions:
- The borrower is ineligible for additional funding
- The borrower has exhausted the limits of his or her eligibility for Title IV loans (Federal Perkins, Stafford, and, as applicable, parent or Grad PLUS)
- The borrower has not filled out a Free Application for Federal Student Aid (FAFSA)
- The borrower does not desire, or refuses to apply for, a Title IV loan
The bundling of private educational loans will be clearly and conspicuously disclosed to the borrower prior to the borrower’s acceptance of the financial aid package.
Iowa Code Section 261F.5(2)
Choice of Lender
Impermissible Activities
Upper Iowa University’s financial aid office will not use its (private and/or FFELP) preferred lender list to:
- Require a prospective borrower to use a lender on our preferred lender list (PLL)
- Deny or otherwise impede a borrower’s choice of lender
- Assign a first-time borrower’s loan to a particular lender through award packaging or other methods
- Cause unnecessary certification delays for borrowers who use a lender that is not listed on our PLL
Iowa Code Sections 261F.6(1)(a) and 261F.6(2)(c), (d), and (e); 34 CFR 682.212(h)(1)(i); 34 FR 682.212(h)(2)(iii), (iv), and (v)
(Applicable to FFELP colleges only)
Regardless of whether Upper Iowa University maintains a PLL, our financial aid office will not:
- Deny a FFELP borrower his or her choice of FFELP lender
- Refuse to certify or delay certification of a FFELP loan based on a borrower’s selection of a lender or guarantor
- Assign a first-time borrower’s FFELP loan to a particular lender through award packaging or other methods
HEA Section 432(m)(1)(B); 34 CFR 682.603(f)(1) and (2)
Consulting and Contractual Arrangements
Impermissible Activities
An officer, employee, or agent of Upper Iowa University who is employed in the financial aid office or who otherwise has direct responsibilities with respect to educational loans will not accept from a private educational loan lender or its affiliate any fee, payment, or other financial benefit as compensation for any type of consulting arrangement or other contract to provide services to or on behalf of the lender. A prohibited financial benefit includes the opportunity to purchase stock on other than free market terms. However, if the lender is a FFELP lender, additional restrictions apply, as noted below.
Iowa Code Section 261F.3(3)
Upper Iowa University will not enter into a contractual arrangement with a FFELP lender to provide services that are related to student aid, or to provide services in exchange for securing FFELP loan applications or otherwise limiting a borrower’s choice of FFELP lender. An organization that is affiliated with Upper Iowa University will not enter into a contractual arrangement with a FFELP lender to provide services that are related to student loans, or to provide services in exchange for securing FFELP loan applications or otherwise limiting a borrower’s choice of FFELP lender.
November 1, 2007, Federal Register, Vol. 72, No. 211, pp. 61976, 61979, and 61981
Permissible Activities
An officer, employee, or agent of Upper Iowa University who is not employed in the financial aid office and who has no direct responsibilities with respect to educational loans may accept compensation from a private lender for a consulting arrangement or other contract to provide services to or on behalf of a lender. However, if the private lender is also a FFELP lender, additional restrictions apply, as noted in the following paragraph.
Iowa Code Section 261F.3(3)
Upper Iowa University may enter into a contractual arrangement with a FFELP lender to provide services only if those services are unrelated to any type of student aid, and are not undertaken to secure FFELP loan applications or limit a borrower’s choice of FFELP lender. An organization affiliated with Upper Iowa University may enter into a contractual arrangement with a FFELP lender to provide services only if those services are unrelated to student loans.
November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61976 and 61979
Loan Counseling
Impermissible Activities
Upper Iowa University will not accept initial (i.e., entrance) or exit loan counseling that is offered in person to our students by a representative of a FFELP lender or guarantor.
34 CFR 682.200(b)(5)(ii)(B); 34 CFR 682.401(e)(2)(iii)
Permissible Activities
Upper Iowa University may request and accept initial (i.e., entrance) and exit loan counseling materials, presentations, or on-line resources from any lender or guarantor. The materials must disclose the identity of the entity that assisted in preparing or providing the materials, and must not be used to promote the lender’s or guarantor’s educational loan or other products. A guarantor’s materials may promote benefits provided under other federal and state programs that the guarantor administers.
Iowa Code Section 261F.4(5)(a); 34 CFR 682.200(b)(5)(ii)(A); 34 CFR 682.401(e)(2)(i)
Loan Terms and Conditions
Impermissible Activities (Applicable to FFELP institutions only)
Upper Iowa University will not request or accept competitive rates on private educational loans made by a private lender that is also a FFELP lender, in exchange for FFELP applications, FFELP application referrals, a specified volume or dollar amount of FFELP loans made, or a preferred lending arrangement for FFELP loans.
Iowa Code Section 261F.3(5); 34 CFR 682.200(b)(5)(iii)(C); November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61983
Upper Iowa University will not place a private educational loan lender on its PLL, or provide that lender with preferred placement on the PLL, in exchange for benefits on FFELP loans that the lender makes to or on behalf of our students.
Iowa Code Section 261F.6(4)
Permissible Activities (Applicable to all institutions)
Upper Iowa University may solicit and accept the following favorable educational loan terms and conditions on behalf of our student and parent borrowers:
- A reduced origination fee
- A reduced interest rate
- Payment of the federal default fee on a Stafford or PLUS loan made under the FFELP
- Benefits offered to a borrower under a repayment incentive program that requires, at minimum, one or more scheduled payments to receive or retain the benefit
- Benefits under a loan forgiveness program for public service or other targeted purposes approved by:
- The Iowa Attorney General for a private loan forgiveness program
- The U.S. Department of Education for a federal loan forgiveness program
An employee of Upper Iowa University may accept favorable terms, conditions, and borrower benefits on an educational loan if the terms, conditions, and benefits on the employee’s loan are comparable to those provided to all Upper Iowa University students.
Iowa Code Section 261F.1(5)(c)
Meals, Refreshments, and Receptions
Impermissible Activities
See the definition of “Gift” for information about cases when meals, refreshments, or other hospitality is considered a prohibited gift.
Permissible Activities
Upper Iowa University’s employees, affiliated organizations, and agents may accept from a private or FFELP lender, or a guarantor, food and refreshments that are reasonable in cost and are offered as an integral part of a training session or conference that is designed to contribute to the professional development of Upper Iowa University’s employees or agents. The food and refreshment sponsored by the lender or guarantor must be offered to all who attend the training session or conference.
Upper Iowa University’s employees may attend a lender- or guarantor-sponsored reception for which food and refreshments are provided, so long as they are general gatherings that are open to all attendees and are held in conjunction with a training session or conference. These events provide attendees with the opportunity for information-sharing on the training being conducted.
In addition, Upper Iowa University may accept from a guarantor food and refreshments that are reasonable in cost and provided in connection with other workshops and forums the agency uses to fulfill its guaranty agency responsibilities.
Iowa Code Section 261F.1(5)(b); 34 CFR 682.200(b)(5)(ii)(C); 34 CFR 682.401(e)(2)(iv) and (v)
Upper Iowa University employees who participate in the planning of a student-aid related training session or conference will ensure that food and refreshments sponsored by a lender or guarantor is reasonable in cost by applying the “prudent person test.” In other words, the cost per person for the sponsored event must not exceed the cost that would be incurred by the prudent person under the circumstances at the time the decision was made to incur the cost. The burden of proof will be, in part, on conference managers to show that costs are consistent with the normal per-person cost of the event.
November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61981
Misleading Identification of Institutional Employees
Impermissible Activities
Upper Iowa University will not permit a lender’s or guarantor’s employee or agent to be identified as an employee, representative, or agent of Upper Iowa University.
Iowa Code Section 261F.4(2)
Opportunity Pools
Definition
An opportunity pool means an educational loan made by a private lender to a borrower that Upper Iowa University guarantees in any manner or that involves Upper Iowa University directly or indirectly paying points, premiums, payments, additional interest, or other financial support to the lender for the purpose of that lender extending credit to the borrower.
Impermissible Activities
Upper Iowa University will not solicit or accept from any lender an opportunity pool to be used for private educational loans in exchange for concessions or promises to the lender that Upper Iowa University will deliver a specified number of loans, loan volume, or, if applicable, a preferred lending arrangement for FFELP loans.
Permissible Activities
Upper Iowa University may solicit or accept from any lender an opportunity pool to be used for private educational loans, if it is not provided in exchange for a promise that Upper Iowa University will deliver to the lender a specified number of private loans or private loan volume, or, if applicable, place that lender on Upper Iowa University’s preferred FFELP lender list.
Iowa Code Section 261F.3(5)
Payments of Educational Loan Costs
Impermissible Activities
Upper Iowa University will not make principal or interest payments on behalf of borrowers to FFELP lenders or to the Federal Direct Loan Program (FDLP) on Federal Stafford and Consolidation loans that repaid Stafford loans (and PLUS?) [checking on USDE’s exact position on this].
USDE Cohort Default Rate Guide, August 2006, Part 2, p. 2.1-9.
Permissible Activities
Upper Iowa University may make principal or interest payments to private loan lenders to lower costs for private educational loan borrowers.
Iowa Code Section 261F.3(7)(b)
Preferred Lender Lists (PLL)
Definition
A preferred lender list is a list of private or FFELP lenders which Upper Iowa University recommends, and with which Upper Iowa University has a preferred lender arrangement. A preferred lender arrangement is an arrangement or agreement between Upper Iowa University and a lender that provides educational loans to our borrowers in which Upper Iowa University recommends, promotes, or endorses the lender’s educational loan product.
Iowa Code Section 261F.1(8) and (9)
Impermissible Activities
Upper Iowa University’s federal or private loan PLL will not include less than three unaffiliated lenders. For this purpose, a lender is affiliated with another lender if any of the following applies:
- The lenders are under the ownership or control of the same entity or individuals
- The lenders are wholly or partly owned subsidiaries of the same parent company
- The directors, trustees, or general partners, or individuals exercising similar functions, of one of the lenders constitute a majority of the persons holding similar positions with the other lender
Upper Iowa University’s federal or private PLL will not include lenders that have offered, or have offered in response to our solicitation, financial or other benefits to Upper Iowa University in exchange for inclusion on the PLL, or a promise that Upper Iowa University or its students will send a certain number of loan applications to the lender.
Iowa Code Sections 261F.6(1)(b) and (c); 34 CFR 682.212(h)(1) and (3)
Preferred Lender List Alternatives
Permissible Activities
Upper Iowa University is not required to maintain a preferred lender list for private or FFELP loans, and may provide no information to educational loan borrowers about lenders. Other acceptable alternatives to a preferred lender list appear below.
Upper Iowa University’s financial aid office may employ the following alternatives to a preferred lender list. Provided all of the following conditions are met, these alternatives are not considered a preferred lender list or preferred lending arrangement under 34 CFR 682.212(h) or Iowa Code Chapter 261F:
- If Upper Iowa University is unable to identify at least three unaffiliated lenders that will make loans to its students or parents sufficient to meet the requirements of a preferred lender list, we may provide the names of all of the lenders that have indicated that they would provide loans to our students and their parents. In providing this information, Upper Iowa University will make it clear that we do not endorse the lenders, and provide a clear statement that the borrower may choose to use any lender that will make loans to the borrower for attendance at Upper Iowa University.
- Upper Iowa University may provide a comprehensive list of lenders that have made loans to our students or parents in the past three to five years (or some other period) and that have indicated that they would continue to make loans to our students. Upper Iowa University will not provide any additional information about the lender, including, for example, the percentage of loans made to our students by a particular lender. Upper Iowa University will make it clear that we do not endorse the lenders, and provide a clear statement that the borrower can choose to use any lender that will make loans to the borrower for attendance at Upper Iowa University.
If Upper Iowa University initially meets the preferred lender list requirement of including a minimum of three unaffiliated lenders, we may be later notified that one or more of those lenders has decided to discontinue making loans to our students and parents. The USDE and the Iowa Attorney General will take such circumstances, over which we have no control, into consideration in determining our compliance until at least July 1, 2009.
USDE Dear Colleague Letter GEN-08-06
If our financial aid office is advised by a student or parent borrower that the borrower is having difficulty obtaining a lender, we may refer the borrower to the Iowa College Student Aid Commission’s web-based list of participating lenders to provide the borrower with additional lending options. Upper Iowa University will not recommend or endorse any lender, and will make it clear that the borrower can choose any lender that will make loans to the borrower for attendance at Upper Iowa University.
Iowa College Student Aid Commission FFELP Lender of Last Resort Policies and Procedures
Publications
Impermissible Activities
Upper Iowa University will not permit a private or FFELP educational loan lender with which it has a preferred lender arrangement to prepare any of our materials related to educational loans, with exceptions permitted by law and noted below under “Permissible Activities.”
Iowa Code Section 261F.4(3) and (5)(a)
Upper Iowa University will not permit a FFELP lender or guarantor to print and distribute our catalogue and other non-counseling or non-student financial aid-related materials at reduced or no cost.
34 CFR 682.200(b)(5)(iii)(C); 34 CFR 682.401(e)(3)(iii)
Except in the case when our institution’s name is part of a lending institution’s legal name, Upper Iowa University will not permit a private lender with which it has a preferred lending arrangement for private loans to use our name, emblem, mascot, logo, other words, pictures or symbols readily identified with Upper Iowa University in the marketing of those loans to our students in a way that implies that Upper Iowa University endorses the lender’s private educational loans.
Iowa Code Section 261F.4(4)
Permissible Activities
Upper Iowa University may request and accept, free of charge, student aid outreach, financial literacy, debt management, default prevention, or default aversion materials and publications from a private or FFELP lender, or a guarantor. Upper Iowa University may also request and accept initial (i.e., entrance) and exit loan counseling materials, presentations, or on-line resources from any lender or guarantor. The materials must disclose the identity of the entity that assisted in preparing or providing the materials, and must not be used to promote the lender’s or guarantor’s educational loan or other products. A guarantor’s materials may promote benefits provided under other federal and state programs that the guarantor administers.
Upper Iowa University may allow the use of our name in the marketing of private educational loans made by a lender with whom we have a preferred lending arrangement, if our name is part of the lending institution’s legal name.
Iowa Code Sections 261F.1(5)(a), 261F.4(4), and 261F.4(5)(a); 34 CFR 682.200(b)(5)(ii)(A) and (B); 34 CFR 682.401(e)(2)(i), (ii), and (iii)
Revenue-Sharing Arrangements
Impermissible Activities
Upper Iowa University’s officers, employees, or agents will not solicit or accept a fee, revenue- or profit-sharing, or other material benefit provided by a private or FFELP lender that issues educational loans to or on behalf of our students in exchange for Upper Iowa University recommending the lender or the lender’s educational loan products.
Iowa Code Sections 261F.1(11) and 261F.3(4)
Staffing Assistance
Impermissible Activities
Upper Iowa University will not permit a private or FFELP educational loan lender with which it has a preferred lending arrangement to staff our financial aid offices or call center, except on a short-term, non-recurring, emergency basis.
Iowa Code Sections 261F.4(3) and 261F.4(5)(b)
Upper Iowa University will not permit an employee or agent of any FFELP lender or guarantor to staff our financial aid offices except on a short-term, non-recurring, emergency basis. The prohibition against staffing assistance from FFELP lenders and guarantors applies regardless of whether the institution has a preferred lending arrangement for federal student loans.
34 CFR 682.200(b)(5)(i)(10); 34 CFR 682.401(e)(1)(i)(F)
Permissible Activities
If Upper Iowa University has a preferred lending arrangement with a private or FFELP educational loan lender, we may permit that lender’s employee or agent to staff our financial aid offices or call center on a short-term, non-recurring, emergency basis.
Regardless of whether Upper Iowa University has a preferred lending arrangement for FFELP loans, we may permit an employee or agent of a FFELP lender or guarantor to staff our financial aid offices only on a short-term, non-recurring, emergency basis.
For this purpose, “emergency” is defined as:
- A State-designated natural disaster
- A Federally-declared natural disaster (identified by the Federal Emergency Management Agency on its website at www.fema.gov)
- A Federally-declared national disaster
- Another localized disaster or emergency approved by the Iowa Attorney General, for staffing assistance requested of a lender with which the institution has a preferred lending arrangement
- Another localized disaster or emergency approved by the USDE, for staffing assistance requested of a FFELP lender or guarantor
Examples:
An institution requests financial aid staffing assistance after a localized disaster, for example, a fire that destroys the building in which the financial aid office is located. To help preserve essential financial aid related services to students, the financial aid office requests assistance from:
- The Iowa College Student Aid Commission. Because the Commission is a FFELP guarantor, permission must be secured from the USDE before the institution may accept the Commission’s assistance. Because the Commission is not a lender with which an institution would establish a preferred lending arrangement, permission from the Iowa Attorney General is not required.
- Lender A, which is a FFELP and private educational loan lender that has no preferred lending arrangement with the institution. Because Lender A is a FFELP lender, permission must be secured from the USDE before the institution may accept Lender A’s assistance. Because Lender A has no preferred lending arrangement with the institution, permission from the Iowa Attorney General is not required.
- Lender Z, which is a FFELP and private educational loan lender with which the institution has a preferred lending arrangement for its private educational loans. Because Lender Z is a FFELP lender, and because Lender Z has a preferred lending arrangement with the institution to provide private educational loans, permission must be secured from both the USDE and the Iowa Attorney General before the institution may accept Lender Z’s assistance.
If an institution requests financial aid office staffing assistance from the Iowa College Student Aid Commission for a localized disaster or emergency, the Commission will secure the required approval from the USDE and provide documentation of that approval to the institution. Otherwise, the Commission recommends that the institution’s financial aid administrator obtain and retain documentation of the state or federal emergency declaration, and, if required for a localized disaster or emergency, approval(s) from the USDE or Iowa Attorney General.
Iowa Code Sections 261F.4(3) and 261F.4(5)(b); 34 CFR 682.200(b)(5)(i)(A)(10); 34 CFR 682.200(b)(5)(iii)(D); 34 CFR 682.401(3)(1)(i)(F); 34 CFR 682.401(e)(3)(v)
State education grants, scholarships, or financial aid funds
Permissible Activities
Upper Iowa University may accept Iowa grants, scholarships, and other state-based financial aid funds administered by the Iowa College Student Aid Commission under Iowa Code Chapter 261.
Iowa Code Section 261F.1(5)(e)
Student Aid-Related Programs
Permissible Activities
A FFELP lender may support and participate in Upper Iowa University’s, or a guarantor’s, student aid and financial literacy outreach activities. The lender’s identity must be disclosed in any materials that the lender assists in preparing or providing, and the lender’s materials must not promote its student loan or other products.
34 CFR 682.200(b)(5)(ii)(B)
Upper Iowa University may request and accept standard materials, activities, or programs on issues related to a private educational loan from a private lender. The lender’s identity must be disclosed in any materials that the lender assists in preparing or providing, and the lender’s materials must not promote its student loan or other products.
Iowa Code Section 261F.1(5)(a) and 261E.4(5)(a)
Upper Iowa University may request and accept student aid outreach, financial literacy, debt management, default prevention and aversion programs developed by a guarantor. The guarantor’s identity must be disclosed in any materials that the guarantor assists in preparing and providing, and the guarantor’s materials must not promote its student loan or other products.
Iowa Code Sections 261F.1(5)(a) and 261F.4(5)(a); 34 CFR 682.401(e)(2)(iii) and (iv); November 1, 2007, Federal Register, Vol. 72, No. 211, pp. 61979 and 61980
Upper Iowa University may also accept services that a guarantor must perform to meet its obligations to administer other Federal and State education programs that are not related to the FFELP, provided the guarantor does not use its role in these programs to secure FFELP loan applications or volume. A guarantor may promote benefits provided under other Federal or State programs the guarantor administers.
November 1, 2007, Federal Register, Vol. 72, No. 211, p. 61982
Technology
Impermissible Activities
Upper Iowa University and its affiliated organization(s) will not accept from a FFELP lender or guarantor either of the following at below market rental or purchase cost:
- Computer hardware
- Computer software that is unrelated to educational loan processing or financial aid
34 CFR 682.200(b)(5)(iii); 34 CFR 682.401(e)(3)(iii)
Upper Iowa University will not accept free data transmission services from any lender that is unrelated to electronic loan processing, or in the case of a FFELP lender, unrelated to student status confirmation data.
Iowa Code Section 261F.1(5)(f); 34 CFR 682.200(b)(5)(ii)(D); 34 CFR 682.401(e)(2)(vii)
Permissible Activities
Upper Iowa University may accept, free of charge, any of the following from a private or FFELP lender, or a guarantor:
- Financial aid related software
- Loan processing data transmission services
- A toll-free telephone number to obtain information about educational loans
Upper Iowa University may also accept free student status confirmation data processing services from a FFELP lender or guarantor.
Iowa Code Section 261F.1(5)(f); 34 CFR 682.200(b)(5)(ii)(D); 34 CFR 682.401(e)(2)(vii)
Training
Impermissible Activities
Upper Iowa University will not accept training relative to the administration of the federal student aid programs from a FFELP lender. Upper Iowa University and its affiliated organization(s) will not accept payment of training or conference registration fees from any FFELP lender.
34 CFR 682.200(b)(5)(i)(A)(7); November 1, 2007 Federal Register, Vol. 72, No. 211, p. 61976 and 61980
Permissible Activities
Upper Iowa University may accept training, free of charge, on the administration of student aid programs from any FFELP guarantor.
November 1, 2007, Federal Register Vol. 72, No. 211, pp. 61976 and 61980
Upper Iowa University may accept standard materials, activities, or programs, including training, on issues related to private educational loans from a private lender.
Iowa Code Section 261F.1(5)(a)
Travel and Lodging
Impermissible Activities
Upper Iowa University will not request or accept lodging or travel costs from a lender or lender servicer, or a guarantor. See the exception below for the Iowa College Student Aid Commission.
Iowa Code Sections 261F.1(5) and 261F.3(1); 34 CFR 682.401(e)(2)(vi)
Permissible Activities
Upper Iowa University’s employees and agents may request reasonable reimbursement from the Iowa College Student Aid Commission for travel and lodging costs, on a limited and case-by-case basis, to facilitate the attendance of our staff in Commission-provided training, Commission facility tours that staff would not otherwise be able to undertake, or to participate in the activities of the Commission’s governing board, a standing official advisory council or task force, or in support of other official Commission activities.
Iowa Code Section 261F.1(5), 261F.2(3), and 261F.3(1); 34 CFR 682.401(e)(2)(vi)
Other Permissible Benefits and Services
Upper Iowa University’s employee, affiliated organization, or agent may accept other benefits or services that are specifically identified in a separate, public notice issued by the Iowa Attorney General and, for services provided by a FFELP lender or guarantor, the USDE.
Iowa Code Section 261F.1(5)(n); 34 CFR 682.200(b)(5)(ii)(A); 34 CFR 682.401(e)(2)(i)
