Financial Aid Code of Conduct and Business Practices for Relationships with Lenders

The following memorializes the USC Office of Financial Aid Code of Conduct and Business Practices for Relationships with Lenders (Code of Conduct) that should apply in our relationships with any lending institution that is an actual or potential lender to USC students and parents. This Code of Conduct applies to all managers and employees in the University Park Financial Aid Office and all financial aid managers and employees in the professional schools (Financial Aid Employees).

1. No Payments to Financial Aid Officers and Employees: Financial Aid Employees may not accept anything of more than nominal value (less than $50.00 per year or an isolated lunch or dinner) from any lending institution. This standard also applies to gifts, meals and other business courtesies.

2. No Significant Equity Interests: Financial Aid Employees may not hold a significant public or private equity interest (e.g., stocks, stock options, warrants or other ownership interests) in any lending institution that is on the university’s lender list. A “significant” interest does not include any mutual funds or other equity interests that are managed by a third party or investments representing less than 1 percent of the total equity of a publicly traded entity.

3. Service on an Advisory Board Requires Approval: Financial Aid Employees may not serve on the advisory board of any lending institution without obtaining prior written approval from the Provost or his/her designee. Financial Aid Employees may not receive any reimbursement or other compensation for serving on an approved lending institution advisory board. Lending institutions shall not pay for any travel, food or lodging expenses incurred as a result of service on an advisory board.

4. No Remuneration to the University: Financial Aid Employees may not accept or receive anything of value from a lending institution on behalf of or as a representative of USC, in exchange for any advantage or consideration given to the lending institution. This prohibition includes, but is not limited to, revenue sharing arrangements, scholarships, reimbursement for printing costs or services, equipment offered at less than fair market value and staffing assistance.

5. No Offer of Funds for Private Loans: Financial Aid Employees shall not request or accept from any lender any offer of funds to be used for private education loans (as defined in section 140 of the Truth in Lending Act), including funds for an opportunity pool loan, to students in exchange for the university providing concessions or promises regarding providing the lender with a specific number of loans made, insured or guaranteed; a specified loan volume of such loans; or a preferred lender arrangement for such loans.  An “opportunity pool loan” is defined as a private education loan made by a lender to a student (or the student’s family) that involves a payment by the institution to the lender for extending credit to the student.

6. Lender Lists Must Serve Students and Parents: Lender lists must be based solely on the best interests of the students or parents, who may use the list without regard to the financial interests of the university.

7. Lender List Disclosure: USC will clearly disclose the process and criteria used to select those lending institutions that appear on its lender lists and related brochures or websites. Students must be told that they have the right and ability to select the lending institution of their choice, regardless of the lender lists.  Lenders shall be listed based on a randomized program. The lender lists shall be reviewed annually.

8. Directing Borrowers to Lenders: Financial Aid Employees may not direct borrowers to particular lenders or refuse or delay loan certifications based on the borrowers lender choice.

9. Prohibition on Call Centers: Financial Aid Employees may not retain or otherwise engage any lending institution to staff call centers to respond to financial aid inquiries by USC parents or staff.

10. Transparency in Employment: Employees of lending institutions must clearly identify that they are employed by a lending institution when interacting with USC students and parents. Employees of lending institutions are not permitted to identify themselves as USC employees to USC students and parents.

11. Entrance/Exit Counseling: Financial Aid Employees will not engage any lending institution to provide entrance or exit counseling to USC students.

The Provost or his/her designee will review this Code of Conduct and may update or revise it at his/her discretion to ensure that it remains current and consistent with university policy and regulatory requirements.

Date:    March 24, 2016