Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Lend Students Less Grief

At Georgetown, we are more aware than most that college is expensive. High tuition rates lead students at Georgetown and universities across the country to take out loans so that they can go to college today and pay for it tomorrow.

The number of students going into debt to go to college has fostered the rapid growth of an entire student loan industry. Unfortunately, that industry, so essential to paving many students’ way to college, has apparently fallen victim to exploitation.

A scandal has come to light in recent weeks that provides a disturbing look at corruption in this industry. According to The New York Times, financial aid directors at three universities held stock in Student Loan Xpress, a student loan company.

All three universities recommend the company to students as a source for loans. More disturbingly, an official at the Department of Education who currently serves in the Office of Federal Student Aid also held shares in the company, and a financial aid officer at another university served as a paid consultant to the company.

In each of these cases university officials faced a clear conflict of interest. If a financial aid officer has a personal stake in recommending a particular lender, he or she cannot provide unbiased advice. DOE officials cannot fairly oversee an industry if they have a financial interest in that industry’s success. These officials allegedly allowed their obligation to protect students to be corrupted by greed.

Unfortunately, the officials in these cases did not work for universities that are small or have little influence.

The officials holding stock in the company worked for Columbia University, the University of Texas and the University of Southern California, while the paid consultant worked for Johns Hopkins University. All are top 50 national universities and considered leaders in higher education.

And Student Loan Xpress is only one company in a very lucrative industry. Last week New York’s attorney general ended his investigation into Citibank for questionable student loan practices when the company agreed to pay a $2 million fine and adopt a code of conduct prepared by the attorney general.

Sallie Mae, which describes itself as “the nation’s leading provider of student loans,” and several other lenders are also currently under investigation in various states. Even the U.S. Senate has begun similar investigations.

Corporations – and at least a few university officials – are making large financial gains off the backs of students and their families. This is deplorable and must be changed. In a society that claims to deeply value higher education, loans yield excessive profits for corporations and place higher education further out of reach of many young people.

Corporations cannot be blamed for maximizing profits. It falls to universities and the government to ensure that high-quality higher education remains affordable. The government must provide responsible oversight of the student loan industry, and a good start would be guaranteeing that officials who serve in this capacity do not have conflicting interests.

University officials must advocate for their students, not private corporations. All universities, including Georgetown, must establish strict rules for behavior of financial aid officials and for selecting preferred lenders. Georgetown’s financial aid office and Patricia McWade, dean of student financial services, should make sure that the recent corruption at other universities is not present on our campus.

Students and parents deserve to be reassured that the high cost of Georgetown tuition is creating the best possible academic environment – not huge corporate profits and incentives for corrupt university officials.

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