Spring Break
Brandeis avoids loans scandal
by Rachel Marder
Senior Editor
News | 5/22/07
Posted online at 5:06 AM EST on 5/22/07
As more rampant abuses in the $85 million student loan industry come to light, the University has remained untouched by the scandals.
Financial aid and admissions officers at universities nationwide have been found guilty of accepting gifts, stock options and consulting payments from private lenders like Student Loan Express and Nelnet in exchange for pointing students exploring financial aid options in their direction.
"It amazed me," Peter Giumette, director of student financial services, said of the scandals. "I had no clue that some of the abuses were so flagrant."
Giumette said private loan companies periodically approach the Alumni Association and other offices with offers, but officials have never accepted them.
"We have no deals with any outfits," Giumette said.
Last February, Student Loan Express offered the University a deal, Giumette said. The company officials said they would donate money to a Jewish charity if Brandeis got prospective students to take out loans from them.
"But fortunately we were able to stay away from that," he Giumette said.
And even though for the last seven or eight years, Brandeis has steered students exclusively toward direct loans mainly from the Massachusetts Educational Financing Authority, a federal non-profit organization, University officials also help prospective students navigate through the private loan industry if federal aid isn't sufficient.
Giumette said that because of the scandals, the University will have to be careful in their advisement.
"We're going to have to be more diligent about how we do it," he said, now that students have more reason to be distrustful of a University's motives.
Giumette said he's worried that, as a backlash from the loans scandal, the government will require universities to stay out of advising students on private loans altogether.
Still, families need advice on where to turn for aid, and universities fill that role, he said. Giumette suggested that the Department of Education publish a national index of "totally objective loan comparisons" to inform students about their options.
"There's no place for consumers to go, so naturally they go to the schools."
Thirty percent of universities are in direct loan programs exclusively, Giumette estimated, and around 70 percent of undergraduates receive financial aid, which includes loans, work-study, Brandeis and government-funded grants and scholarships.
Not going through the private sector has worked out well for Brandeis, Giumette said. Funds move more swiftly to students from the government and the University is more in control of the process, he added.
"We don't have to rely on a third party to get the job done," he said.
Financial aid and admissions officers at universities nationwide have been found guilty of accepting gifts, stock options and consulting payments from private lenders like Student Loan Express and Nelnet in exchange for pointing students exploring financial aid options in their direction.
"It amazed me," Peter Giumette, director of student financial services, said of the scandals. "I had no clue that some of the abuses were so flagrant."
Giumette said private loan companies periodically approach the Alumni Association and other offices with offers, but officials have never accepted them.
"We have no deals with any outfits," Giumette said.
Last February, Student Loan Express offered the University a deal, Giumette said. The company officials said they would donate money to a Jewish charity if Brandeis got prospective students to take out loans from them.
"But fortunately we were able to stay away from that," he Giumette said.
And even though for the last seven or eight years, Brandeis has steered students exclusively toward direct loans mainly from the Massachusetts Educational Financing Authority, a federal non-profit organization, University officials also help prospective students navigate through the private loan industry if federal aid isn't sufficient.
Giumette said that because of the scandals, the University will have to be careful in their advisement.
"We're going to have to be more diligent about how we do it," he said, now that students have more reason to be distrustful of a University's motives.
Giumette said he's worried that, as a backlash from the loans scandal, the government will require universities to stay out of advising students on private loans altogether.
Still, families need advice on where to turn for aid, and universities fill that role, he said. Giumette suggested that the Department of Education publish a national index of "totally objective loan comparisons" to inform students about their options.
"There's no place for consumers to go, so naturally they go to the schools."
Thirty percent of universities are in direct loan programs exclusively, Giumette estimated, and around 70 percent of undergraduates receive financial aid, which includes loans, work-study, Brandeis and government-funded grants and scholarships.
Not going through the private sector has worked out well for Brandeis, Giumette said. Funds move more swiftly to students from the government and the University is more in control of the process, he added.
"We don't have to rely on a third party to get the job done," he said.
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