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Financial Aid Code of Conduct
I. Definitions
A. “Lending Institution” or “Lender” shall mean (i) any entity that itself, or through an affiliate,
engages in the business of making loans to students, parents or others for purposes of financing
higher education expenses or that securitizes such loans, or (ii) any entity, or association of
entities, that guarantees education loans. “Lending institution” or “Lender” shall not include the
University or the state or federal government.
B. “University” shall mean the university, college, professional trade school or other entity
providing post secondary education that adopts this Code of Conduct.
C. “Opportunity Loans” shall mean loans to international students or other students who,
because they have poor or no credit history, do not have access to student loans on reasonable
terms.
D. "Compensation” shall mean anything of value including, but not limited to, money, credits,
loans, discounts, payments, fees, forgiveness of principal or interest, reimbursement of expenses,
charitable contributions, stock options, consulting fees, educational grants, vacations, prizes,
gifts or other items of value, whether given directly or indirectly.
E. “Trade Association” shall mean any higher education, financial aid, lending or banking trade,
industry or professional association that receives Compensation within the preceding 12-month
period from any Lending Institution or Lender. The Connecticut Conference of Independent
Colleges shall not be deemed to be a “trade association” solely by virtue of its contract to
administer the Connecticut Higher Supplemental Loan Authority (“CHESLA”).
F. “Outside Director” shall mean a member of a Lender’s Board of Directors or Board of
Trustees who receives Compensation from such Lender in connection with his or her service on
the Board of Directors or Board of Trustees and who receives no other compensation from the
Lender as an officer, employee, or agent of the Lender or otherwise.
G. “Agent” shall mean a person acting as a representative of and at the direction of or under the
control of a University where such person’s responsibilities with respect to the University relate
primarily to the University’s activities involving financial aid or the business of higher education
loans.
II. Code of Conduct
A. Prohibition of Certain Compensation to University Employees
1. No University trustee, director, officer, or Agent, or any employee who is employed in the
financial aid office of the University or who otherwise has responsibilities with respect to higher
educational loans or other financial aid at his or her University, and no spouse or dependent
children of any such persons (“Family Member”), shall accept any Compensation of more than
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nominal value (not to exceed $50), directly or indirectly, during any 12-month period from or on
behalf of a Lending Institution or Trade Association, except that this provision shall not be
construed to prohibit any officer, trustee, director, Agent or employee of the University, or any
of their Family Members, from receiving Compensation for the conduct of non-University
business with any Lending Institution or Trade Association or from accepting Compensation
that is offered to the general public.
2. Notwithstanding the prohibitions in subsection II.A.1 or any other provision of this Code of
Conduct: (a) The University may hold membership in any nonprofit professional association;
(b) A University trustee, director, officer, employee who is not employed in the financial aid
office of the University and does not have responsibilities with respect to higher educational
loans or financial aid, may serve as an outside director of a Lending Institution or Trade
Association at the Outside Lending Institution’s or Trade Association’s established
compensation rates for Outside Directors, provided that any University trustee, director, officer
or employee serving on the board of the Lending Institution or Trade Association is precluded
from participating in such board’s discussions or decisions that might affect the interests of the
University, and provided further that such University trustee, director, officer or employee
complies with the University’s conflict of interest policy, and receives annual written notice of
the requirements of both this Code of Conduct and the University’s conflict of interest
policy; Further, notwithstanding the prohibitions in subsection II.A.1, a trustee, director, officer
or employee of a Lending Institution or Trade Association who does not have responsibilities
with respect to higher education loans or financial aid shall not be prevented from serving on the
Board of Directors of a University solely by virtue of his or her position with the Lending
Institution or Trade Association, provided that any such person serving on the board of the
University is precluded from participating in such board’s discussions or decisions that might
affect the interests of such Lender or Trade Association or that relate to financial aid or higher
education loans.
3. Nothing in this Code of Conduct shall be construed to conflict with the requirements of
Connecticut General Statutes §§10a-201 et seq., including without limitation §10a-203(a), and
§§10a-221 et seq.
4. The prohibitions set forth in this subsection II.A shall include, but not be limited to, a ban on
any payment or reimbursement by a Lending Institution or Trade Association to a University
employee or Family Member for lodging, meals, or travel to conferences or training seminars
unless such payment or reimbursement is related solely to non-University business. University
employees whose duties relate to financial aid may accept food or refreshments of nominal value
provided or paid for by a Lender or Trade Association at a meeting, conference or seminar
related to their professional development or training. University employees are not precluded
from attending any educational or training program related to financial aid or higher education
loans where no registration fee is charged to any attendee because of a Lender’s or Trade
Association’s sponsorship or support of the program, and provided that the registration fee is
limited to covering the costs associated solely with the education or training component of the
program.
B. Limitations on University Employees Participating on Lender Advisory Boards
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No University officer, trustee, director, Agent or employee, or any of their Family Members,
shall serve on an advisory board for a Lender. Lenders can obtain advice and opinions of
financial aid officials on financial aid products and services through Trade Associations, industry
surveys or other mechanisms that do not require service on Lender advisory boards and provided
such person receives no Compensation for such service. This provision shall not apply to
participation on advisory boards that are unrelated in any way to financial aid or higher
education loans.
C. Prohibition of Certain Compensation to the University
1. Neither the University, nor any alumni association, booster club, foundation, athletic
organization, social organization, academic organization, professional organization or other
organization affiliated with the University (“Affiliated Organizations”), may accept any
Compensation from any Lending Institution or Trade Association in exchange for any advantage
or consideration provided to the Lending Institution or Trade Association related to the Lending
Institution’s or Trade Association’s financial aid or education loan activity. This prohibition
shall include, but not be limited to (i) revenue sharing by a Lending Institution or Trade
Association with the University or Affiliated Organizations, (ii) the receipt by the University or
Affiliated Organizations from any Lending Institution or Trade Association of any equipment or
supplies, including without limitation, computer hardware and software, for which the University
pays below-market prices, and (iii) printing costs or services, provided that a University or
Affiliated Organizations shall not be prohibited from accepting a Lender’s or Trade
Association’s own standard printed brochures or informational material that does not contain the
University’s logo or otherwise identify the University.
2. Notwithstanding anything else in this subsection II.C., the University may accept assistance
comparable to the kinds of assistance provided by the Secretary of the U.S. Department of
Education to schools under or in furtherance of the Federal Direct Loan Program.
3. Nothing in this subsection shall prohibit a University from accepting endowment gifts, capital
contributions, scholarship funding, or other financial support from a Lender or Trade
Association, so long as the University gives no competitive advantage or preferential treatment
to the Lender or Trade Association related to its education loan activity in exchange for such
support.
D. Preferred Lender Lists
In the event that the University promulgates a list of preferred or recommended lenders or
similar ranking or designation (“Preferred Lender List”), then:
1. Every brochure, web page or other document that sets forth a Preferred Lender List must
clearly disclose, textually or by clearly designated hyperlink, the process by which the
University selected Lenders for said Preferred Lender List, including but not limited to the
criteria used in compiling said list and the relative importance of those criteria; and