The Wall Street Journal published an article today that offers a critical look at a 2003 policy decision made by NASFAA and its relationship with student loan companies. However, the article failed to include some important facts that would have given readers a more accurate perspective.

The article focuses on a NASFAA Board decision about whether to curb gifts from lenders. The article states, "Well before recent conflict-of-interest allegations cast a shadow on the student-loan business, the trade group for college-aid officers considered setting clear rules to curb gifts from lenders -- and decided against it."

The article also highlights lenders' roles in the national conference and as members of NASFAA to illustrate the links between NASFAA and lenders, stating, "NASFAA's declared mission is to support financial-aid professionals at colleges, universities and career schools and claims memberships from more than 3,000 postsecondary institutions. The association says it 'represents the interests of students and financial aid administrators to the Congress, the Department of Education, and other regulatory agencies.' But it also opens its ranks to banks and other lenders."

However, the article fails to mention that revenue from dues received from lender members during 2005 were approximately $165,643, which is 4.5 percent of NASFAA's overall revenue from membership dues. In addition, only 61 of NASFAA's 2,861 members (2 percent) are lenders.

In addition, student loan lenders have been members of the National Association of Student Financial Aid Administrators (NASFAA) almost since its inception in 1966. NASFAA membership is open to organizations having an interest in promoting the effective administration of student financial aid, and those involved in providing services and products to meet that objective. In addition to postsecondary institutions and lenders, NASFAA members include educational associations, governing agencies, scholarship providers, guarantee agencies, financial service organizations, higher education law firms, education research groups, counselors, and students. However, only institutional members have voting rights within the association and constituent members cannot hold office. Other members also do not sit on any committee that is involved in policymaking.

While the article highlighted the financial impact of lenders at the national conference (lenders spent $553,000 on sponsorship, exhibitor and advertising fees in 2005), it failed to mention other benefits of lenders attending the conference.

Dues, sponsorships, and funds received for exhibit hall space go to services that are directed toward training and educational activities for NASFAA institutional members. These include seminars, Webinars, reference materials, research, and similar services that help schools to better serve college-bound students and promote equity, access, and choice in higher education.

"It is in the best interest of students and parents if those in the lending industry are well-informed about regulations and laws, as well as the types of challenges facing students on campus," Martin said in a statement to The Wall Street Journal. "Although expressly developed and targeted to our institutional members, NASFAA's conferences and educational materials are also extremely beneficial to those in the lending industry. An informed lending community cannot help but to better serve students and parents.

"Likewise, it is beneficial for our institutional members to have an exposure to the types of insights about the lending process that members of the loan industry can provide so that schools can better help families understand the terms of the loans they are borrowing, or identify which programs will best meet their needs," Martin continued.

NASFAA President Dallas Martin confirmed that the NASFAA board rejected a requirement to report gifts larger than $50 and guidelines that included a warning against "quid pro quos" where college officials receive personal financial benefit in exchange for putting a loan company on its preferred-lender list.

"Asked if approving those measures might have eliminated some of the abuses singled out by Mr. Cuomo, [Martin] said, 'I think it would have,'" the article reports.

The article also quotes from an internal NASFAA document that states that there was "much concern" about the proposal to set clear rules on gifts from lenders and that board members felt the proposal was "micro-management and overkill."