Enrollment Management
University of Texas at Austin

Student Financial Aid Code of Conduct

The purpose of this policy is to prohibit perceived or actual conflicts of interests by financial aid staff in the administration of financial aid programs and to outline enforcement mechanisms that exist to address violations of this code in accordance with state and federal requirements and in alignment with national standards and practices. This policy provides consumer protections in financial aid administration.

The University of Texas at Austin will prohibit conflicts of interest in the administration of financial aid programs and will take active measures to make this policy accessible to students and consumers to ensure awareness of consumer protections. Violations of the Code of Conduct will result in enforcement as outlined in the policy.

Student Financial Aid Code of Conduct

Conflicts of Interest – It is the policy of The University of Texas at Austin to prohibit conflicts of interest with respect to education loans, including federal education loans and private education loans.

Gifts

  1. a. An employee of The University of Texas at Austin who is employed in the financial aid office or who otherwise has responsibilities with respect to education loans may not solicit or accept any gift from a lender, guarantor, or servicer of education loans.
  2. b. This prohibition applies to a gift to a family member of an employee of The University of Texas at Austin, or to any other individual based on that individual’s relationship with 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 official position of the employee.
  3. c. For purposes of this section, “gift” means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimis amount. The term includes a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, by payment in advance, or by reimbursement after the expense has been incurred.
  4. This section does not prohibit the acceptance of the following:
    1. i. 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. ii. food, refreshments, training, or informational material furnished to an employee of The University of Texas at Austin as an integral part of a training session that is designed to improve the service of a lender, guarantor, or servicer of education loans to the institution if the training contributes to the professional development of the employee;
    3. iii. favorable terms, conditions, and borrower benefits on an education loan provided to a student employed by The University of Texas at Austin if comparable to those provided to all students of the institution;
    4. iv. entrance and exit counseling services provided to borrowers to meet the responsibilities of the institution for entrance and exit counseling as required by 20 U.S.C. 1092 (b) and (l) if the institution’s staff are in control of the counseling (whether in person or electronically), and the counseling does not promote the products or services of any specific lender;
    5. v. philanthropic contributions to The University of Texas at Austin 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; or
    6. vi. state education grants, scholarships, or financial aid funds administered by or on behalf of a state.

Advisory Board Compensation

  1. An employee of The University of Texas at Austin who is employed in the financial aid office or who otherwise has responsibilities with respect to FFEL Program loans or private education loans or other student financial aid of The University of Texas at Austin, and who serves on an advisory board, commission, or group established by a lender, guarantor, or group of lenders or guarantors, may not receive anything of value from the lender, guarantor, or group of lenders or guarantors, except as provided by Subsection (b).
  2. This section does not prohibit an employee from being reimbursed for reasonable expenses incurred in serving on the advisory board, commission, or group.

Contracting Arrangements

  1. a. An employee of The University of Texas at Austin who is employed in the financial aid office or who otherwise has responsibilities with respect to education loans or other student financial aid of The University of Texas at Austin, and who serves on an advisory board, commission, or group established by a lender, guarantor, or group of lenders or guarantors, may not receive anything of value from the lender, guarantor, or group of lenders or guarantors, except as provided by Subsection (b).
  2. This section does not prohibit:
    1. i. an employee of The University of Texas at Austin who is not employed in the financial aid office and who does not otherwise have responsibilities with respect to education loans from performing paid or unpaid service on a board of directors of a lender, guarantor, or servicer of education loans;
    2. ii. an employee of The University of Texas at Austin who is not employed in the financial aid office but who has responsibility with respect to education loans from performing paid or unpaid service on a board of directors of a lender, guarantor, or servicer of education loans, provided that the employee recuses himself or herself from participating in any decision of the board regarding education loans at The University of Texas at Austin; or
    3. iii. an officer, employee, or contractor of a lender, guarantor, or servicer of education loans from serving on the U. T. System Board of Regents, provided that the officer, employee, or contractor recuses himself or herself from any decision regarding education loans at a U. T. System institution.

Stock Ownership Prohibited

  1. a. An employee of The University of Texas at Austin who is employed in the financial aid office or who otherwise has responsibilities with respect to education loans may not own stock or hold another ownership interest in a lender, other than through ownership of shares in a publicly traded mutual fund or similar investment vehicle in which the person does not exercise any discretion regarding the investment of the assets of the fund or other investment vehicle.

Interaction With Borrowers

The University of Texas at Austin may not:

  1. for a first-time borrower, assign, through award packaging or other methods, the borrower’s loan to a particular lender; or
  2. refuse to certify, or delay certification of, any loan based on the borrower’s selection of a particular lender or guaranty agency.

Offers of Funds for Private Loans

  1. a. The University of Texas at Austin may not request or accept from any lender any offer of funds to be used for private education loans, including funds for an opportunity pool loan, to students in exchange for The University of Texas at Austin providing concessions or promises regarding providing the lender with
    1. a specified number of education loans;
    2. a specified loan volume of those loans; or
    3. a preferred lender arrangement for those loans.
  2. In this section, “opportunity pool loan” means a private education loan made by a lender to a student attending the institution or to a student’s family member that involves a payment, directly or indirectly, by The University of Texas at Austin of points, premiums, additional interest, or financial support to the lender for the purpose of the lender extending credit to the student or family member.

Staffing Assistance

  1. The University of Texas at Austin may not request or accept any assistance with call center staffing or financial aid office staffing from any lender, except as provided by Subsection (b).
  2. This section does not prohibit The University of Texas at Austin from requesting or accepting assistance from a lender related to:
    1. professional development training for financial aid administrators;
    2. the provision of educational counseling materials, financial literacy materials, or debt management materials to borrowers, provided that the materials disclose to borrowers the identification of any lender that assisted in preparing or providing those materials; or
    3. the provision of staffing services on a short-term, nonrecurring basis to assist The University of Texas at Austin 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.

Revenue-Sharing Arrangements

  1. The University of Texas at Austin may not enter into any revenue-sharing arrangement with a lender.
  2. In this section, “revenue-sharing arrangement” means an arrangement between an institution and a lender under which a lender provides or issues an education loan to students attending the institution or to their families, and the institution recommends the lender or the lender’s loan products in exchange for the lender paying a fee or providing other material benefits, including revenue or profit sharing, to the institution or an officer or employee of the institution.

Definitions

Education Loan – a federal or private loan made to a student or parent for the student’s cost of attendance.

Federal Loan – a Federal Direct Subsidized Loan, Federal Direct Unsubsidized Loan, Federal Direct Graduate PLUS Loan, and the Federal Direct Parent PLUS Loan.

Private Loan – includes state affiliated loans, loans from commercial lenders, and institutional loans. A private education loan does not include an extension of credit under an open-end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by a real property or a dwelling.

Lender – the term includes the following:

    • a private education lender as defined in Section 140 of the federal Truth in Lending Act; or
    • any other person engaged in the business of securing, making, or extending education loans on behalf of the lender.

Opportunity Pool Loan – a private education loan made by a lender to a student attending the institution or to a student’s family member that involves a payment, directly or indirectly, by the institution of points, premiums, additional interest, or financial support to the lender for the purpose of the lender extending credit to the student or family member.

Gift – any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimis amount. The term includes a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, by payment in advance, or by reimbursement after the expense has been incurred.

Revenue – Sharing Arrangement – an arrangement between an institution and a lender under which a lender provides or issues an education loan to students attending the institution or to their families, and the institution recommends the lender or the lender’s loan products in exchange for the lender paying a fee or providing other material benefits, including revenue or profit sharing, to the institution or an officer or employee of the institution.