The Student Loan Code of Conduct (Sunshine Act)
Here is a list of do-s from the Student Loan “Sunshine Act”. This is hopefully good news for the future of the student loan industry.
As follow is the code of conduct – (guideline we hope gets followed)
Each institution would be required to develop and display on its web-site a code of conduct with these provisions:
- Institutions would be prohibited from recommending a lender in exchange for the lender providing material benefits to the institution or its employees.
- Lenders and affiliates would be prohibited from giving any financial benefits (including the chance to purchase stock) to employees with any financial aid responsibility as compensation for consulting services, advisory council service, or otherwise advising lenders.
- Lenders, guarantors, or services would be prohibited from offering gifts to institutional employees-including any gratuity, favor, discount, entertainment, hospitality, loan, or other item valued at more than a nominal amount. Examples are gifts of services, transportation, lodging, or meals.
The term “gift” would not apply to informational material related to loans or financial literacy (e.g., a brochure). Similarly, food, refreshments, training, or informational material that is an integral part of a training session designed to improve the lenders service or contribute to professional development of the institution’s employees would be allowed.
Counseling provided to borrowers for exit counseling would also be allowed, provided that an institution’s staff controls the counseling and that the counseling doesn’t favor a single lender.
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