I remember reading in one of Jim Hightower’s books (sorry, can’t remember which) about how EMT’s, those capable heroes in charge of saving your life, are a relatively new entity. In fact, it wasn't too long ago that ambulance services were provided exclusively by another organization – your local funeral 
home. Now if that’s not a conflict of interest, I don’t know what is. Oh, wait – here’s one [1]:
The telephone number looks like any other university extension. And when students call with questions about financial aid, the recorded voice at the other end says, "Thank you for calling Texas Tech University's student financial center."
But what is remarkable about the center is not so much that it is actually located hundreds of miles away from Texas Tech's Lubbock campus. It is that the people giving advice are not university employees at all -- instead they work for Nelnet, a company that made more than $68 million last year off of student loans.
Nelnet's role staffing the help line -- which is not disclosed to callers -- is a window into the often hidden relationships between loan companies and the colleges that students rely on for advice about how to finance their schooling. Nelnet is one of several lenders that the university recommends to its students, though it is not among its 10 largest lenders.
As long as we’re on a role, why not put pharmaceutical companies in charge of healthcare, oil companies in charge of energy policy, and Halliburton in charge of national defense. Oh, crap … looks like all those are already taken!
[2]
Links:
[1] http://www.boston.com/news/nation/articles/2007/03/29/ties_between_colleges_lenders_raise_questions/
[2] http://www.addtoany.com/share_save?linkurl=http%3A%2F%2Fthehindsightfactor.com%2Funiversity_financial_aid_helpline_outsourced_to_loan_company&linkname=College%20financial%20aid%20advice%20outsourced%20-%20to%20loan%20company%21
Comments
Re: College financial aid advice outsourced - to loan company!
When I was getting my masters at Boston University I watch a university that was on the "cutting edge" of whoring itself for cash. I can only imagine others are better or worse now.
I was on a project that was with Barnes and Noble and BU. The Project manager lied to the dean and the Dean fired me without any "investigation" whatsoever-- entirely on this guys word. More "cut throat" than the private sector was this bastion of higher learning.
Later that guy had to skip town-- Boston, as he was on the verge of being sued big time for other shady/criminal stuff he was doing against an Internet company.
Re: College financial aid advice outsourced - to loan company!
Re: College financial aid advice outsourced - to loan company!
I fail to see a conflict of interest here. At worst, the "financial advisors" will advise the students to take a loan via Nelnet, as opposed to another lender. Regardless, the students aren't calling the help line and asking, "how can I manage to get more money for free?". They're likely calling to see what loan options they have, which a lending company is more than willing to provide and is probably most qualified to comment on.
As the article says, Nelnet is only one of the many lenders (not even in the top 10) for the school. I would imagine a phone conversation goes something along the lines of:
Student - "Hi, I need to find $10,000 for next year's tuition."
Advisor - "No problem. Nelnet is offering interest deferred loans right now at X%."
Student - "Is that my only option?"
Advisor - "No, So-and-so bank has one that's not interest deferred, but 2% lower."
bla. bla. bla.
Regardless, unless there is actual fraud being committed, or an attempt to monopolize the lending process through unfair market practices, this is hardly a fox watching the hen-house scenario.
Re: College financial aid advice outsourced - to loan company!