Code of Conduct for Educational Loans

Statement of Ethical Principles

KCTCS provides that the primary goal of the institutional financial aid professional is to help students achieve their educational potential by providing appropriate financial resources. To this end, this statement provides that the financial aid professional shall:

• Be committed to removing financial barriers for those who wish to pursue postsecondary learning.
• Make every effort to assist students with financial need.
• Be aware of the issues affecting students and advocate their interests at the institutional, state, and federal levels.
• Support efforts to encourage students, as early as the elementary grades, to aspire to and plan for education beyond high school.
• Educate students and families through quality consumer information.
• Respect the dignity and protect the privacy of students, and ensure the confidentiality of student records and personal circumstances.
• Ensure equity by applying all need analysis formulas consistently across the institution’s full population of student financial aid applicants.
• Provide services that do not discriminate on the basis of race, gender, ethnicity, sexual orientation, religion, disability, age, or economic status.
• Recognize the need for professional development and continuing education opportunities.
• Promote the free expression of ideas and opinions, and foster respect for diverse viewpoints within the profession.
• Commit to the highest level of ethical behavior and refrain from conflict of interest or the perception thereof.
• Maintain the highest level of professionalism, reflecting a commitment to the goals of KCTCS. 

Code of Conduct for Financial Aid Professionals

Any KCTCS financial aid professional is expected to always maintain exemplary standards of professional conduct in all aspects of carrying out his or her responsibilities, specifically including all dealings with any entities involved in any manner in student financial aid, regardless of whether such entities are involved in a government sponsored, subsidized, or regulated activity. In doing so, a financial aid professional should:

• Refrain from taking any action for his/her personal benefit.
• Refrain from taking any action he/she believes is contrary to law, regulation, or the best interests of the students and parents he/she serves.
• Ensure that the information he/she provides is accurate, unbiased, and does not reflect any preference arising from actual or potential personal gain.
• Be objective in making decisions and advising his/her institution regarding relationships with any entity involved in any aspect of student financial aid.
• Refrain from soliciting or accepting anything of other than nominal value from any entity (other than an institution of higher education or a governmental entity such as the U.S. Department of Education) involved in the making, holding, consolidating, or processing of any student loans, including anything of value (including reimbursement of expenses) for serving on an advisory body or as part of a training activity of or sponsored by any such entity.
• Disclose to KCTCS, in such manner as KCTCS may prescribe, any involvement with or interest in any entity involved in any aspect of student financial aid.
• These principles should apply throughout the administration of the programs for which the financial aid professional is responsible, including, but not limited to, FFELP.

There should never by any difference between “ethical” and “best” practices. The ethical practice is the best practice. When a practice or policy arises that appears in conflict with these principles, it is the obligation of the financial aid professional to bring this to the attention of those responsible within his/her institution, and to seek a resolution consistent with these principles.

Title 34 – Education, Code of Federal Regulations

Title 34 of the Code of Federal Regulations, Section 601.21, require the development, administration and enforcement of a code of conduct governing educational loan activities.

• Elizabethtown Community & Technical College shall not enter into any revenue-sharing arrangements with any lender. A revenue-sharing arrangement is defined as any arrangement between an institution and a lender under which the lender provides or issues private education loans to students attending the institution (or to the families of those students), the institution recommends the lender or the loan products of the lender and, in exchange, the lender pays a fee or provides other material benefits, including revenue or profit-sharing, to the institution or to its officers, employees, or agents.
• No officer or employee of the financial aid office (or an employee or agent who otherwise has responsibilities with respect to educational loans) may solicit or accept any gift from a lender, guarantor, or servicer of education loans. A gift is defined as any gratuity, favor, discount, entertainment, hospitality, loan or other item having monetary value of more than a de minimus amount. The term gift also includes services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or by reimbursement. The term gift does not include the following: (1) standard material, activities, or programs on issues related to a loan; (2) food, refreshments, or training that are part of a training session to improve service if training contributes to professional development of the agent; (3) favorable terms, conditions, and borrower benefits on a private education loan provided to a student employed in the financial aid office if terms are comparable to those provided to all student employees; (4) entrance/exit counseling if school staff are in control and counseling does not promote the products of any lender; (5) philanthropic contributions from a lender, servicer or guarantee agency not related to or made in exchange for any advantage related to private education loans; or (6) state education grants, scholarships, or financial aid funds administered on behalf of a State.
• An employee of the financial aid office (or an employee who otherwise has responsibilities with respect to private education loans or financial aid) who serves on an advisory board, commission, or group established by a lender or group of lenders is prohibited from receiving anything of value from such entities, except the employee may be reimbursed for reasonable expenses incurred by the employee for serving on such boards, commissions or groups.
• No officer or employee of the financial aid office (or an employee or agent who otherwise has responsibilities with respect to educational loans) may accept from a lender, or an affiliate of any lender, any fee, payment, or other financial benefit as compensation for any type of consulting arrangement or contract to provide services to or on behalf of a lender relating to educational loans.
• Officers or employees of the financial aid office shall not steer borrowers to particular lenders or delay loan certifications. For any first-time borrower, the college will not assign, through award packaging or other methods, the borrower’s loan to a particular lender. In addition, the institution shall not refuse to certify, or delay the certification, of any loan based on the borrower’s selection of a particular lender.
• The college shall not request or accept from any lender any offer of funds for private loans, including funds for an opportunity pool loan, to students in exchange for providing promise of a specific number of private education loans, a specific loan volume, or a preferred lender arrangement for such loans. An opportunity pool loan means a private education loan that involves a payment, directly or indirectly, by the institution of points, premiums, additional interest or financial support to the lender for the purpose of the lender extending credit to the student.
• The college shall not request or accept from any lender any assistance with call center or financial aid office staffing, except the institution is not prohibited from requesting/accepting the following: (1) professional development training for aid officers; (2) counseling, financial literacy, or debt management materials for borrowers as long as materials disclose that the lender prepared or provided the materials; or (3) staffing on a short-term, nonrecurring basis to assist with aid-related functions during an emergency.
• The institution will not participate in or offer a preferred lender list.