The provisions of this Model Code of Conduct apply to all employees of CUNY or of any of is constituents colleges.
For purpose of this Model Code, a lender is defined as (i) any entity that itself or through an affiliate engages in the business of making loans to students, parents, or others in order to finance higher education expenses or to securitize such loans; (ii) any entity, or association, that guarantees such loans; or (iii) any industry, trade, or professional association that receives money from any such entity.
No employee may accept a gift of more than nominal value from a lender. This provision includes, but is not limited to, a ban on payment or reimbursement by a lender to an employee for lodging, meals, or travel or conferences or training seminars.
No employee may accept any compensation of any kind or reimbursement of expenses for serving as a member of a lender’s advisory board.
Neither CUNY nor any of its colleges may accept anything of value from a lender in exchange for any advantage or consideration provided to the lender related to its education loan activity. This prohibition includes, but is not limited to, ban on (i) revenue sharing by a lender with CUNY or a college; (ii) acceptance of computer hardware for which below market value is paid; and (iii) acceptance of printing cost or services. Revenue sharing means an arrangement whereby a lender pays a higher education institution a percentage of the principal of each loan directed toward the lender from a borrower at the institution.
If CUNY or any of its colleges adopts a list of preferred or recommended lenders (known as a “preferred lenders list”), it must disclose (i) the process for selection of lenders on the list and (ii) include a prominently displayed statement wherever the list of preferred lenders is provided that students and their parents have the right to select the education loan provider of their choice. Further, the decision to include a lender on such a list shall be reviewed annually.
No lender shall be placed on a preferred lender list or in favored placement on a list for a particular type of loan in exchange for benefits provided to the college or to students in connection with a different type of loan.
No lender shall be placed on a preferred lender list unless the lender provides assurance to CUNY or the relevant college and to borrowers that the advertised benefits upon repayment will continue even if the lender’s loans are sold and any such preferred lender list.
No employee or agent of a lender may staff a CUNY or college financial aid office. Neither CUNY nor any of its colleges may identify an employee or agent of a lender as an employee or agent of CUNY or one of its colleges.
Neither CUNY nor any of its colleges shall link or otherwise direct potential borrowers to any electronic Master Promissory Notes or other loan agreements in an electronic format that incorporates any preferred lender list or similar device into the electronic medium, including any drop-down menus of possible lenders for the student to select. Instead, students must be presented with the opportunity to enter the lender code or name for any lender offering the relevant loan.
If CUNY ever enters the “School as Lender” program as permitted under federal law, it may not treat School as Lender loans any differently than if the loans originated directly from another lender. The School as Lender program allows higher education institutions to function directly as a lender to its students.
Neither CUNY nor any of its colleges shall enter into agreements with lenders to provide “Opportunity Loans.” Opportunity Loans are loans provided up to a specified amount to students with poor or no credit history, or international students, whom the lender claims would otherwise not be eligible for the lender’s alternative loan program. Opportunity Loans may not be in the borrower’s best interest because of the high interest rate on the loans.