Eleven Missouri public, private colleges sign student loan code

Eleven public and private colleges in Missouri have agreed to a code of conduct regarding student loans, Attorney General Jay Nixon said Wednesday.

Three Rivers Community College in Poplar Bluff, Mo., was among the schools who agreed to the code. "When we got the initial request from the attorney general, we put it as one of our highest priorities," said Dr. Larry Kimbrow, executive vice president and vice president of academic affairs at Three Rivers. "We wanted to show the general public that we had nothing to hide."

Nixon reached a similar agreement in April with Washington University in St. Louis and says more schools could follow.

Southeast Missouri State University and most of the other public, four-year schools, including the University of Missouri campuses, haven't signed the agreement.

Southeast president Dr. Ken Dobbins said that's not because school officials aren't in agreement with points contained in the code.

"We have been in discussions with the attorney general's office, and we also are aware that Congress has legislation pending that would have a code of conduct that we are in compliance with," Dobbins said.

The agreements follow a national look led by New York Attorney General Andrew Cuomo into loan arrangements that he says favored banks and schools over students.

The idea of the code is to protect students from kickbacks lenders pay to colleges in exchange for steering students their way.

"Students and their families may feel unempowered as consumers, particularly if they are steered to certain lenders without receiving enough information to make the choices that are most appropriate," Nixon said in a written statement.

Under the code, schools are to end or avoid revenue-sharing agreements with lenders and bar employees from being paid by lenders.

Dobbins said Southeast officials and employees receive no financial incentives from lenders regarding student loans.

Washington University ended a revenue-sharing agreement with Education Finance Partners of California in 2006 that would have provided money for the university if it led more students to the company, Nixon said. The university said it never received payments.

Nixon's office said none of the latest 11 schools to sign on to the code had revenue-sharing agreements.

Dobbins said Southeast never had a revenue-sharing agreement like those uncovered in Cuomo's student loan investigation. "We are concerned that the perception out there is that every university is guilty of what happened in New York and that is not true, and that is not true at Southeast," he said.

The code drawn up by the Missouri attorney general's office prevents schools from preselecting particular lenders on loan paperwork, leaving it to students to decide, and bars college employees from being paid to serve on lenders' advisory boards. Schools must spell out how they create "preferred lender" lists. Starting Aug. 1, lenders also are not allowed on such lists at affected schools unless they too agree to a code of conduct with the attorney general.

Three Rivers' Kimbrow said the community college doesn't receive kickbacks from lenders, nor do any of its staff receive money from companies that make student loans.

"We had no objections to the code of conduct. We already were complying with the requirements he had listed," Kimbrow said.

The University of Central Missouri, in Warrensburg, said it's already following the principles in its agreement with Nixon, so it shouldn't have to make changes.

Besides Central Missouri and Three Rivers, the other schools that adopted the code include Avila University in Kansas City; Drury University in Springfield; Hannibal-LaGrange College in Hannibal; Mineral Area College in Park Hills; Missouri Valley College in Marshall; Northwest Missouri State University in Maryville; Park University in Parkville; Southwest Baptist University in Bolivar; and State Fair Community College in Sedalia.

Southeast Missourian staff writer Mark Bliss contributed to this story.