The University of Wisconsin-Oshkosh is switching to a new Web site that lists the top financial institutions that have loaned students money in the past after severing its relationship with a company as a “preferred lender,” college officials said.

Last month, UWO scrapped its preferred lender list for students seeking financial aid following local and national criticism of the cozy relationships that have been established between lenders and universities.

The decision comes at the same time as Congress considers legislation that would ban a practice in which private lenders share a cut of their loan volume with financial aid offices in exchange for being place on the offices’ list of preferred lenders. The House of Representatives approved the bill, 414-3, on Wednesday.

Congress’ interest in the issue stems from New York Attorney General Andrew Cuomo, who said new rules that say how loan companies deal with campuses should be applied nationwide. Cuomo’s investigators in New York have uncovered multiple arrangements that benefited schools and lenders at the expense of students.

In Oshkosh, a letter was sent to UWO students eligible for financial aid at the beginning of the school year, to make them aware of a preferred lender option. The preferred lender, Education Finance Partners paid the university $9,400 under an agreement in which UWO would brand and promote the loan program in exchange for payments. UWO terminated its financial relationship with Educational Finance Partners in April.

UWO no longer has a preferred lender list for students interested in financial aid opportunities, said Vice Chancellor for Student Affairs Petra Roter.

Instead, the university has switched to a new method – a Website, which gives students a list of the top 35 institutions students in the past have borrowed from. UWO is one of the first campuses to use the beta version of the website.

“We opted do to this way before this all started because we have always been about choice and educating our students about borrowing, to be good consumers and to find the product that best suits the students and their families,” Roter said.

U.S. Rep. Tom Petri, R-Fond du Lac, said universities and vocational schools should pick lenders based on what is best for the students.

“If a lender wants to give a discount or wants to figure out how to make it more convenient for a student, that’s fine. But the point is, it’s not the job of the people at the loan office to get the benefits from lenders, it’s to help the students,” Petri said.

Petri said he thinks the legislation is a critical first step.

“A lot of these students are 18 when they come into college for the first time and they trust the financial aid office,” said Tom Culligan, Petri’s legislative assistant for educational issues.

Information from: www.thenorthwestern.com

This entry was posted on Sunday, May 13th, 2007 at 11:04 pm and is filed under College Loans, Student Loan. Tags: College, Education, Financial Aid, Student. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.