The dirty secret about colleges as an institution is that they only half-heartedly care about educating their students, they are really more concerned with making a profit. Students come and go, but cash flow is eternal.
Colleges Relying on Lenders to Counsel Students
Some universities use lenders to conduct workshops required by law for many students taking out loans.Ms. [Rachel] Jones, a 22-year-old who has $17,000 in student loans, had unwittingly stumbled upon another undisclosed relationship between universities and loan companies.
Recent investigations have largely focused on incentives lenders give universities to get coveted placement on the preferred lending lists students use to take out loans when they enter college. But colleges also give lenders crucial access to students when they are graduating, using lenders to conduct exit counseling required under federal law for students who have taken out federally guaranteed student loans.
In some cases, loan company representatives come on campus and run sessions for seniors on loan repayment. In others, colleges direct students to loan company Web sites, including Wells Fargo, Citibank and Sallie Mae. And in many cases, the loan companies are pushing a product: their consolidation loans.
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Weeks after her exit counseling at Loyola, Ms. Jones is still marveling over the session. She wrote an opinion column in the student newspaper, The Los Angeles Loyolan, denouncing the workshop as “nothing more than an hourlong advertisement.”“It just seemed really shady and underhanded the way it was run,” Ms. Jones said. “I still feel like I was duped.”
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The Indiana Institute of Technology directs students to complete exit counseling through OpenNet, an online service run by Sallie Mae, the nation’s largest lender to college students. The Web sites of George Washington University and Case Western Reserve University in Cleveland show that they do, too.Before signing in, students must agree to a disclaimer allowing Sallie Mae to use their data for purposes beyond loan processing, “provided the proposed usage does not violate applicable laws and regulations or any confidentiality obligations.”
The financial aid director at Indiana Tech, Teresa M. Vasquez, said, “I didn’t know that.”
So we're to believe that no university really knew what was going on until the national media and Congress (Senator Ed Kennedy, for instance) starting asking questions? Uhh, yeah, right.
Tags: corruption, /university
