Friday, April 13, 2007

Could it happen here?

The Chronicle of Higher Education has two articles on the New York Attorney General's probe into higher education relations with the lenders who make loans to the students. One article, by Paul Basken focuses on the relationships:

Following a series of ethics scandals, financial-aid directors at American colleges are resigning themselves to a future of less-cooperative relations with banks, blaming federal officials and their own lobbying group for failing to better protect them, and suggesting students may suffer. Some higher-education advocates are less gloomy, anticipating a future of less-biased advice for student borrowers as they negotiate the $85-billion student-loan industry.

Several financial-aid directors who serve on bank-run "advisory boards" said they realized that recent allegations of unethical conduct by some of their colleagues would probably end such practices as strategy sessions paid for by lenders.

(snip)Are the advisory boards "a mechanism to really build a relationship" with the bank?, Ms. Bauder asked. "Sure. Do they have the fancy dinners? Sure. But they're a common business practice, and I don't want these common business practices to be muddled in with these very flagrant and reprehensible actions that have been taken by individuals within the industry."

Ms. Bauder said she had served on several advisory boards during her 17-year career in college financial aid, including the Citizens Bank board, which she quit last year because her duties as director left too little time.

"There is no connection, there is no cause and effect" between service on advisory boards and the selection of a preferred lender, she said.

I find the story unfolding to be uncomfortably like the relationships between big vendors and law librarians. Does anybody else see similarities here?

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