After learning the director of financial aid at the University of Wisconsin-Milwaukee sits on an advisory board of a private student loan company, some are concerned about what could be an ethical gray area.
The Milwaukee campus controversy surrounds Jane Hojan-Clark, who sits on the Student Loan Board of Xpress, a company that has come under scrutiny recently after New York Attorney General Andrew Cuomo discovered colleges were receiving financial kickbacks from student loan companies.
Financial aid administrators across the country that are associated with Student Loan Xpress have come under scrutiny as well.
Last week, The New York Times reported financial aid administrators at Columbia University, the University of Texas and the University of Southern California held stock in Student Loan Xpress while the company was on the universities' preferred lender lists.
According to The New York Times, Cuomo's aides presented new details Monday that financial aid officers at John Hopkins University and Capella University were paid consultants for Student Loan Xpress.
Susan Fischer, director of financial aid at the University of Wisconsin-Madison, defended Hojan-Clark, saying she sits on the advisory board to represent students on access to loans.
"She has no stock, no payback," Fischer said. "She is just trying to help her students and unfortunately is being used as an example of what not to do."
Tom Culligan, legislative assistant to U.S. Rep. Tom Petri, R-Wis. — who sits on the House Education and Labor Committee currently examining the student loan industry –said no matter the intention of the financial aid officers, it is best to be neutral because it is easiest to serve students.
"A lot of student financial aid officers are good people but get a negative perception," Culligan said. "Remaining neutral and impartial in these cases eliminates controversy."
Petri is working with his colleagues to ensure more transparency between financial aid officers and student loans companies, Culligan said. However, he added that ultimately Petri would like to see preferred lender lists eliminated.
At UW-Madison, financial aid administrators choose not to sit on any advisory boards, so there is little conflict of interest and little perception of unethical practice.
Fischer said student loan companies have asked her to serve on an advisory board, but added she is not comfortable with the idea and does not have the time for it regardless.
"I do not criticize colleagues who do serve on advisory boards," Fischer said. "Advisory boards do deserve a student voice, but it is often construed as a conflict of interest."
Fischer said UW-Madison students are told to maximize the money they first receive from the government through Stafford loans.
However, Fischer said since the majority of students need additional support through loans from private companies.
"We publish five lenders for private companies," Fischer said. "We do not consider them preferred but rather suggested."
Fischer said loans are approved from various lenders — not only the five listed — and the school's website links students to a more detailed list of alternative loan companies.
"We do not get anything back from loan companies — no revenue sharing — nor are we interested in building relationships," Fischer said. "We just want to help our students."
