I. Purpose

The purpose of this policy is to prohibit conflicts of interest in situations involving student financial aid and to establish standards of conduct for employees with responsibility for student financial aid.

II. Applicability

This policy applies to all employees who work in the Office of Financial Aid and Scholarships and all other University employees who have responsibilities related to education loans or other forms of student financial aid.[1]  

III. Definitions

  1. Conflict of Interest: A conflict of interest exists when an employee’s financial interests or other opportunities for personal benefit may compromise, or reasonably appear to compromise, the independence of judgment with which the employee performs his/her responsibilities at Ball State.
  2. Gift: Any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimus amount. The term includes a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred. The term “gift” does not include any of the following:
    1. Standard materials, activities, or programs on issues related to a loan default aversion, default prevention, or financial literacy, such as a brochure, a workshop, or training.
    2. Training or informational material furnished to Ball State as an integral part of a training session designed to improve the service of a lender, guarantor, or servicer of educational loans to the University, if such training contributes to the professional development of the University’s employees.
    3. Favorable terms, conditions, and borrower benefits on an education loan provided to a student employed by the University or an employee who is the parent of a student if such terms, conditions, or benefits are comparable to those provided to all students of the University and are not provided because of the student’s or parent’s employment with the University.
    4. Entrance and exit counseling services provided to borrowers to meet the University’s responsibilities for entrance and exit counseling under federal law, so long as the Ball State University employees are in control of the counseling, and such counseling does not promote the products or services of any specific lender.
    5. Philanthropic contributions to an institution from a lender, servicer, or guarantor of education loans that are unrelated to education loans or any contribution from any lender, guarantor, or servicer that is not made in exchange for any advantage related to education loans.
    6. State education grants, scholarships, or financial aid funds administered by or on behalf of a State.
  3. Opportunity Pool Loan: A private education loan made by a lender to a student attending the University or the family member of such a student that involves a payment, directly, or indirectly, by the University of points, premiums, additional interest, or financial support to such lender for the purpose of such lender extending credit to the student or the family.
  4. Revenue-Sharing Arrangement: An arrangement between the University and a lender under which (a) a lender provides or issues a loan to students attending the University or to the families of such students; and (b) the University recommends the lender or the loan products of the lender and in exchange, the lender pays a fee or provides other materials, or benefits, including revenue or profit sharing, to the University or its employees.

IV. Institutional Policy Regarding Education Loans and Student Financial Aid  

  1. Revenue-Sharing Arrangements
    Ball State University will not enter into any revenue-sharing arrangements with any lender.
  2. Interaction with Borrowers  
    When participating in the Federal Direct Loan Program, Ball State will assign a first-time borrower’s federal loan to the Federal Government as the lender.
    Under no circumstances will the University assign a student’s private student loan to a particular lender, or refuse to certify or delay certification of any private loan, based upon the borrower’s selection of lender or guaranty agency.
  3. Private Loans  
    Ball State will not request or accept from any lender any offer of funds to be used for private education loans,[2] including funds for an opportunity pool loan, to students in exchange for the University providing concession or promises regarding providing the lender with (i) a specified number of federal loans; (ii) a specified federal loan volume; or (iii) a preferred lender arrangement for federal loans.
  4. Co-Branding
    Ball State will not permit a private educational lender[3] to use the University’s name, emblem, mascot, logo, or any other words, pictures, or symbols associated with the University to imply endorsement of private educational loans by that lender.
  5. Staffing Assistance  
    The University will not request or accept from any lender any assistance with call center staffing or financial aid office staffing. Nothing in this section, however prevents the University from accepting assistance from a lender related to (i) professional development training for its staff; (ii) providing educational counseling materials, financial literacy materials, or debt management materials to borrowers, provided that such materials disclose to borrowers the identification of any lender that assisted in preparing or providing such materials; or (iii) staffing services on a short-term non-recurring basis to assist the University with financial aid-related functions during emergencies, including State-declared or federally declared natural disasters, federally declared national disasters, and other localized disasters and emergencies identified by the Secretary of Education.

V. Code of Conduct  

  1. Conflict of Interest:
    1. No employee shall have a conflict of interest with respect to any education loan or other student financial aid for which the employee has responsibility.
    2. No employee may process any transaction related to his/her own personal financial aid eligibility or that of a relative.[4]
  2. Gifts
    No employee may accept any gift from a lender, guarantor, or servicer of education loans. A gift to a family member of an employee or to any other individual based on that individual’s relationship with the employee or to any other individual based on that individual’s relationship to the employee shall be considered a gift to the employee if the gift is given with the knowledge and acquiescence of the employee and the employee has reason to believe the gift was given because of the employee’s position at the University.
    Token awards from professional associations (state, regional, or national) which recognize professional milestones or extraordinary service to parents and students, or scholarships for conference attendance or other professional development opportunities, may be accepted.  
  3. Prohibited Contracting Agreements
    No employee in the financial aid office or otherwise having responsibilities for loan administration shall accept from any lender or affiliate of any lender any fee, payment, or other financial benefit (including the opportunity to purchase stock) as compensation for any type of consulting or other contract to provide services to a lender or on behalf of the lender relating to education loans.
  4. Advisory Board Compensation  
    No employee who serves on an advisory board, commission, or group established by a lender, guarantor, or group of lenders or guarantors may receive anything of value from the lender, guarantor, or group of lenders or guarantors in return for that service.

VI. Policy Violations  
Violations of this Policy may result in disciplinary action, up to, and including dismissal. 

  1. Agents and officers of the University with responsibility for education loans or other student financial aid are also expected to abide by terms of this Policy.
  2. As defined in the federal Truth in Lending Act, 15 USCA § 1631 et seq.
  3. As defined in the federal Truth in Lending Act, 15 USCA § 1631 et seq..
  4. For the purposes of this policy, a “relative” is defined as an individual with whom an employee has a relationship by blood, marriage, adoption, domestic partnership, or other personal relationships in which objectivity might be impaired.