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Ethics

Student Loan Code of Conduct (III.A.3)

Volume III: Ethics
Chapter A: Conduct
Responsible Officer: Vice President for Ethics and Compliance
Responsible Office: Vice President for Ethics and Compliance
Date Issued: June 15, 2009
Date Last Revised: November 18, 2011

TABLE OF CONTENTS

Statement of Policy
Reason for This Policy
Individuals and Entities Affected by this Policy
Who Should Know this Policy
Exclusions
Web Site Address for this Policy
Contacts
Definitions
Responsibilies
Procedures
Related Documents, Forms, and Tools
History and Update
Appendices

STATEMENT OF POLICY

This Policy(1) establishes Purdue University's Student Loan Code of Conduct applicable to all Purdue officers, Purdue employees, and Purdue Agents involved with the administration of Student Loans or who otherwise have responsibilities related to Student Loans.

The elements of the Student Loan Code of Conduct are as follows:

  1. Purdue officers and employees, and Purdue Agents, are prohibited from having a Conflict of Interest with respect to any Student Loan.
  2. This Student Loan Code of Conduct shall be published prominently on the University's Web site.
  3. The CO shall develop procedures to ensure that each officer, employee, and Purdue Agent with any responsibility with respect to Student Loans shall be informed about the provisions in this Student Loan Code of Conduct (i) when such person or entity first assumes any such responsibility, and (ii) at least annually thereafter for as long as such person or entity retains any such responsibility.
  4. Purdue shall not enter into any Prohibited Revenue Sharing Arrangement with any lender.
  5. Officers and employees who are employed in any Purdue financial aid office or who otherwise have responsibilities with respect to Student Loans, and Purdue Agents with such responsibilities, shall not ask for or accept any Prohibited Gift from any lender, guarantor, or servicer of Student Loans.
  6. Officers and employees who are employed in any Purdue financial aid office or who otherwise have responsibilities with respect to Student Loans, and Purdue Agents with such responsibilities, shall not enter into any Prohibited Contracting Arrangement.
  7. Purdue shall not (i) assign, through award packaging or other methods, a Student Loan of a first time borrower to a particular lender, or (ii) refuse to certify, or delay the certification of, any Student Loan, based on a borrower's selection of a particular lender or guaranty agency.
  8. Purdue shall not request or accept from any lender any offer of funds for private education loans (as defined in the federal Truth in Lending Act) to students, including funds for an opportunity pool loan, in exchange for any commitment by the University (i) to provide the lender with a specified number or volume of Student Loans, or (ii) to enter into a preferred lender arrangement for such loans.
  9. Purdue shall not ask for or accept any Prohibited Staffing Assistance from any lender.
  10. Officers and employees who are employed in any Purdue financial aid office or who otherwise have responsibilities with respect to Student Loans or other Purdue student financial aid shall not ask for or accept any Prohibited Advisory Board Compensation.
  11. If an officer, employee, or Purdue Agent is uncertain whether any particular matter falls within or is governed by any of the foregoing provisions, such person or entity shall not proceed unless and until he, she, or it has received written approval from the CO after full disclosure of the relevant facts and circumstances to the CO.

(1) Capitalized terms are defined in the definitions section in this Policy.

REASON FOR THIS POLICY

This Policy is established (i) to ensure that Purdue officers and employees and Purdue Agents will administer all Student Loan programs in an honest, ethical, and legal manner, and (ii) to satisfy the requirements imposed by the HEOA on Purdue as a participant in federal loan programs to establish and administer a Student Loan Code of Conduct meeting the requirements of the HEOA.

INDIVIDUALS AND ENTITIES AFFECTED BY THIS POLICY

This Policy affects all Purdue faculty, staff, students, and Purdue Agents involved in or with responsibility for any aspect of any federal student loan program or with student financial aid, and the Purdue Human Resource Services department.

WHO SHOULD KNOW THIS POLICY

  • Trustees
  • President
  • Vice Presidents
  • Chancellors
  • Vice Chancellors
  • All officers involved in or with responsibility for any aspect of any federal student loan program or with student financial aid
  • All employees involved in or with responsibility for any aspect of any federal student loan program or with student financial aid
  • All Purdue Agents
  • Human Resource Services employees with responsibilities for maintaining personnel files of officers or employees involved in or with responsibility for any aspect of any federal student loan program or with student financial aid

EXCLUSIONS

There are no exclusions from this Policy.

WEB SITE ADDRESS FOR THIS POLICY

www.purdue.edu/policies/ethics/iiia3.html

CONTACTS

Subject Contact Telephone E-mail
Policy Clarification CO (765) 494-5830 vpec@purdue.edu
Purdue West Lafayette Campus Executive Director, Division of Financial Aid (765) 494-5090 facontact@purdue.edu
Purdue Calumet Director of Financial Aid and Student Accounts (219) 989-2301 finaid2@calumet.purdue.edu
Purdue North Central Director of Financial Aid (219) 785-5460 finaid@pnc.edu
Indiana University- Purdue University Fort Wayne Director of Financial Aid (260) 481-6820 finaid@ipfw.edu

DEFINITIONS

The following terms shall have the following meanings when used in this Policy:

Certificate of Acknowledgment
The certificate to be signed by each Purdue officer, employee, and Purdue Agent when such person or entity first assumes duties and responsibilities that are covered by this Policy, and once per year after that, to acknowledge that the person or entity has read and will comply with this Policy.

Certificate of Compliance
The certificate to be signed by each DFA once per year to certify that he or she has complied with this Policy during the year then ending, and that to the best of his or her knowledge, all Purdue officers, employees, and Purdue Agents providing services on the DFA's campus have also complied with this Policy.

CO
The Compliance Officer, who shall be Purdue's Vice President for Ethics and Compliance or a Purdue officer or employee to whom said Vice President assigns the primary responsibility for administering this Policy.

Conflict of Interest
A situation where the Financial Interest of an officer, employee, or Purdue Agent compromises, or could appear to compromise, his, her, or its judgment or ability to carry out responsibilities associated with Student Loans. A Conflict of Interest may take many forms, but in general arises when an officer, employee, or Purdue Agent in a relationship with an outside person or organization is in a position to influence the University’s administration of Student Loans or other financial aid in ways that could lead directly or indirectly to financial gain for the officer, employee, or Purdue Agent, or their Dependents.

Dependent
An officer's, employee's, or Purdue Agent's (including individual owners, officers, and employees of a Purdue Agent that is a legal entity) spouse or unemancipated children (including stepchildren and adoptees) under the age of 18, or anyone more than one-half of whose support is provided during a year by an officer, employee, or Purdue Agent (including individual owners, officers, and employees of a Purdue Agent that is a legal entity).

DFA
The Executive Director of Financial Aid on Purdue's West Lafayette campus and the Purdue employee with analogous responsibilities for financial aid programs on each Purdue regional campus.

Financial Interest
Any interest that will, could, or is intended to, lead to a profit or an ascertainable increase in the income or net worth of an officer, employee, Purdue Agent, and/or a Dependent. Such a profit or increase in income or net worth could be realized through the receipt of anything of monetary value.

HEOA
The federal Higher Education Opportunity Act, Public Law 110-315.

Policy
This policy establishing a Student Loan Code of Conduct.

Prohibited Advisory Board Compensation
Compensation or anything of value paid or provided in return for service on an advisory board, commission, or group established by a lender or guarantor, or by a group of lenders or guarantors, of Student Loans. "Advisory Board Compensation" does not include reimbursement for reasonable expenses incurred in serving on such a board, commission, or group.

Prohibited Contracting Arrangement
Any contract or other arrangement involving the payment by a Student Loan lender, or the affiliate of any Student Loan lender, of any fee or other financial benefit (including the opportunity to purchase stock) as compensation for any type of consulting arrangement or other contract to provide services to or on behalf of a lender relating to Student Loans, unless the CO provides written confirmation that a proposed contract or arrangement is permitted by the HEOA following full disclosure to the CO of the facts and circumstances related to the proposed arrangement.

Prohibited Gift
Any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimus amount by a lender, guarantor, or servicer of Student Loans to (i) a Purdue officer, a Purdue employee, or a Purdue Agent, or (ii) a family member of such officer, employee or agent (including a family member of an owner, officer, or employee of a Purdue Agent that is a legal entity), if the officer, employee or agent (a) knows of and acquiesces in the gift, and (b) has reason to believe that the gift was given because of his, her, or its position. The term "Prohibited Gift" includes a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after an expense has been incurred.

The term "Prohibited Gift" does not include (i) standard materials, activities, or programs such as brochures, workshops, or training on issues related to loans, default aversion or preventions, or financial literacy, (ii) food, refreshments, training, or informational materials contributing to the professional development of an officer, employee, or Purdue Agent that are provided as an integral part of a training session designed to improve the services of a lender, guarantor, or servicer of Student Loans to Purdue, (iii) favorable terms, conditions and benefits on a Student Loan provided to a student employed by Purdue if the same terms, conditions, and benefits are provided to all Purdue students, (iv) entrance and exit counseling services provided to borrowers as long as Purdue's staff are in control of the counseling and the counseling does not promote the products or services of any specific lender, (v) philanthropic contributions to Purdue from a lender, guarantor, or servicer of Student Loans that are unrelated to Student Loans, or any contributions from a lender, guarantor, or servicer that is not made in exchange for any advantage related to Student Loans, or (vi) education grants, scholarships, or financial aid funds administered by or on behalf of a state.

Prohibited Revenue Sharing Arrangement
An arrangement between Purdue and a lender under which (i) the lender would provide or issue a Student Loan to Purdue students or their families, and (ii) Purdue would recommend the lender or its loan products, and in exchange, the lender would pay any fee or provide any other material benefits, including revenue or profit sharing, to Purdue, to a Purdue officer or employee, or to a Purdue Agent.

Prohibited Staffing Assistance
Any assistance from any lender with respect to staffing of any Purdue call center or financial aid office, unless the CO provides written confirmation that proposed staffing assistance is permitted by the HEOA following full disclosure to the CO of the facts and circumstances related to the proposed assistance.

Purdue, University, and Purdue University
Purdue University, including its regional campuses and satellite locations.

Purdue Agent
Any person or entity legally authorized by Purdue to act on Purdue's behalf with respect to Student Loans.

Student Loan(s)
A loan or loans offered under any federal education loan program.

Student Loan Code of Conduct
The Student Loan Code of Conduct established by this Policy.

RESPONSIBILITIES

The CO is responsible for interpreting this Policy and for establishing mechanisms and procedures to promote overall compliance with this Policy.

Each DFA is responsible for identifying those officers, employees, and Purdue Agents on his or her campus who need to comply with this Policy, and for ensuring that each such person or entity executes a Certificate of Acknowledgment (i) when the person or entity first assumes duties or responsibilities covered by this Policy, and (ii) once per year after that for as long as the person or entity retains duties or responsibilities that are covered by this Policy. Each DFA is also responsible for providing a Certificate of Compliance to the CO once per year.

Human Resource Services employees with responsibility for maintaining personnel files of Purdue officers and employees are responsible for putting original Certificates of Acknowledgment in the personnel files of employees who sign the certificates.

All Purdue officers, employees, and Purdue Agents involved in or with responsibility for any aspect of any federal student loan program or with student financial aid are responsible for being familiar with and for complying with this Policy to the extent applicable to his, her, or its duties and responsibilities, and for executing a Certificate of Acknowledgment upon the request of a DFA.

PROCEDURES

As soon as possible after the effective date of this Policy, each DFA will (i) identify all Purdue officers, employees, and Purdue Agents who are involved in or who have responsibility for any aspect of any federal student loan program or with student financial aid on the DFA's campus, and (ii) see that each such person or entity receives a copy of this Policy and signs a Certificate of Acknowledgment.

Each DFA will identify each additional Purdue officer, employee, and Purdue Agent who subsequently becomes involved with or assumes such responsibilities on the DFA's campus and will see that such person or entity receives a copy of this Policy and signs a Certificate of Acknowledgment when the officer, employee, or agent first becomes involved with or assumes such responsibilities.

By no later than June 15 of each year, each DFA will see that each Purdue officer, employee, and Purdue Agent who is then involved in or has responsibility for any aspect of any federal student loan program or with student final aid on the DFA's campus signs an additional Certificate of Acknowledgment.

Each Purdue officer, employee, or Purdue Agent shall review this Policy and sign a Certificate of Acknowledgment whenever requested to do so by a DFA.

By no later than June 30 of each year, each DFA will execute and provide to the CO a Certificate of Compliance with respect to the year then ending.

Each DFA will forward all original Certificates of Acknowledgment (i) signed by Purdue officers and employees providing services on the DFA's campus to the Human Resource Services department for placement in their personnel files, and (ii) signed by Purdue Agents providing services on the DFA's campus to the CO, who will maintain a file for such certificates.

RELATED FORMS, DOCUMENTS, AND TOOLS

HISTORY AND UPDATE

November 18, 2011: Policy number changed to III.A.3 (formerly X.1.1).

June 15, 2009: This is the first University policy establishing a Student Loan Code of Conduct for compliance with the HEOA.

APPENDICES

There are no appendices to this Policy.