  February 2003  Volume XVIII Number 7 |
February 2003 Volume XVIII Number 7 |
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In November, I (as well as Darry Voigt, Mary Sommers and Roger Koester) attended the NASFAA Board of Directors' meeting in Savannah, Georgia. After a year of observing this governing body from the "Peanut  Gallery", it was nice to be able to "sit at the big table" with the other full fledged members of the Board. And what a meeting to cut my teeth on representing the regional association! The vast majority of the meeting was devoted to the report of the NASFAA Reauthorization Task Force. I must say, I am totally impressed with the outstanding job by the members of the Task Force chaired by Laurie Wolf, Executive Dean of Student Services at the Des Moines Area Community Colleges in Iowa. Our RMASFAA representatives on this Task Force, Norm Finlinson (Brigham Young University in Utah) and Jack Taylor (University of Kansas Medical Center), have served us well in developing draft recommendations for the NASFAA Board to consider. We spent a considerable amount of time discussing and debating each recommendation in a marathon session that lasted well into the evening. This effort gave me a greater appreciation of this process and how our actions will impact the betterment of the delivery of financial aid to our students. It is my hope my full participation in the debates, evaluations and voting for or against a recommendation resulted in a set of proposals, which are good for students and their families. There was one recommendation, however, which, quite frankly, took me by surprise. It dealt with "Illegal Inducements". The Task Force recommended developing new statutory language requiring "annual disclosure to the Department of Education the date, amount, purpose, recipient's name, and type of every single payment, gift or gratuity over $50 for all such expenditures by a lending entity to a post secondary institution and/or an individual at a post secondary institution." (Lending entity is defined as lender, guaranty agency, and their agents, subsidiaries, etc.) The rationale for this recommendation is that there are evidently a small number of participants in the FFEL program who are now violating the current illegal inducement section of the Higher Education Act. Supposedly the Department of Education under the current regulation cannot (or chose not to) do anything about it. According to the Task Force, there are also a small number of our colleagues at schools who are encouraging such behavior.Examples were cited of what some in the lending community were doing and what some college administrators (notice I didn't necessarily say financial aid administrators) were demanding from our colleagues in the lending community. You could have knocked me over with a duck's feather! We are not talking about the traditional 50 pounds of chocolate that schools receive typically during the holidays or the occasional lunch or dinner function either. These are major items in which the individual person directly benefits, big time. I don't know what surprised me the most; the fact the Task Force wanted to micro-regulate this situation for all on behalf of supposedly a small number of individuals and organizations who have "crossed the line", or that some of our colleagues would stoop so low that it would appear they compromise ethical principals for the benefit of significant personal gain. Without sounding too moralistic, it is my opinion, both scenarios are flat out wrong! I see both sides of the situation, one cannot legislate morality but yet something has to be done to curtail unethical behavior for a small group of individuals who seek significant personal gain at the possible detriment of the best interests of students. There is no way to ever stop the few from their misjudgments and lack of concern for their colleagues or the profession as a whole. So the question of putting into place rules or laws that make their misjudgments more difficult to participate in or at least expose it by disclosure has to be balanced with the burden it places on the vast majority of honest, hard working and sincere individuals both in the lending community as well of those who work in financial aid offices. So what is an "inducement for personal gain"? Is it a person buying you a drink, lunch/dinner, taking you to a sporting event, an all expense paid trip to see their service center, provide van transportation for a group to attend a RMASFAA meeting, or paying for a round of golf while you are attending their advisory council meeting? This happens all the time in the corporate world -- why is it any different with student financial aid? Well for one tax payers money (loan subsidies) is involved and two, the financial aid office controls lender lists, perhaps indirectly restricting what lender a student may choose. These questions become more difficult to answer when the individuals providing these items are often times friends who you have known professionally (and often times personally) for many years. Not to mention with institutional budgets being extremely tight, accepting a dinner invitation or transportation to a meeting might actually benefit the whole rather than the individual by providing savings to your institution's travel budget. The Task Force in this recommendation makes no moral judgments as to what is right or wrong or what are inducements. The recommendation simply requires the lending entities to disclose their expenditures paid on behalf of an individual over $50 on a public web site and let others make the appropriate conclusions. I worry that if we go down that regulatory self-disclosure path for the lending community, we, as financial aid administrators, may also have to publicly report every gift, meal, and token we receive from the lending community. I don't know about you, but my time is limited now trying to serve students and if such a proposal were developed it would certainly dilute those precious hours even more. On the other hand, some states already have self-disclosure laws for public officials, and the US Department of Health and Human Services recently issued such guidance for pharmaceutical companies in marketing their drugs to doctors and pharmacies. There is some research that suggests such a regulation may curtail obvious illegal inducements. Would such required reporting make us think twice about accepting an expensive meal, gift, or trip from a lending entity? Probably so especially if names begin to appear in the Chronicle of Higher Education reporting individuals, lending entities or schools as accepting or providing inducements. Maybe this proposal isn't such a bad idea after all. Tough questions. We certainly have a responsibility as a profession to address this in a manner that restricts the gross abuses without penalizing those not involved. So my friends, I am torn on how to vote on this issue. The recommendation was tabled until the next NASFAA Board of Director's meeting in May. Discussions are underway with the lending community by NASFAA staff and other educational associations to see if there could be some other ways to accomplish the same thing without imposing strict burdensome regulatory language. I would like to hear your thoughts on this topic. Give me a call at 800.260.6458, drop me an e-mail at jswanson@coloradocollege.edu or maybe we can have a restorative beverage together next time we see each other at your state spring meeting. Dutch treat, of course. Cheers - Jim
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