Dear Mr. Ethics,
I work in the financial aid office of large public four-year university. Back when I was paying off my own student loans, I had a frustrating experience with a particular private student loan provider. That company is not on my institution’s preferred lender list, but students still sometimes select it. Can I recommend my students choose a different option when I’m counseling them about borrowing?
I Know From Experience
NASFAA's Code of Conduct states that "A borrower's choice of a lender will not be denied, impeded, or unnecessarily delayed by the institution, even if that lender is not included on the institution's preferred lender list.” It also mandates that “Information provided by the financial aid office is accurate, unbiased, and does not reflect preference arising from actual or potential personal gain.” Though you wouldn’t be gaining anything on a personal level by dissuading students from using a certain lender (except maybe some karmic payback for prior frustrations!), it’s best to avoid referencing your own experience when talking with students. You can suggest students consider lenders on your institution’s recommended list--which of course would have been constructed using unbiased objective criteria--but you should not redirect students from a lender if that is their selection. Take solace in the fact that you are already helping students by arming them with a wealth of unbiased information and being available when they need your assistance.
Publication Date: 4/24/2015