University of North Carolina Lays Down Own Rules About Lenders

Angela Januzzi

July 17, 2007

In the past few months, in the wake of the loan scandals surrounding set lending rates for certain schools, the Education Department proposed that colleges and universities who participate in the federal guaranteed loan program are to offer a minimum of three lenders to students. Individual schools, however, have begun imposing their own regulations.

The University of North Carolina announced this past May that colleges in its system which provide loans through the federal direct loan program, in which the government is the sole lender, also must follow the three-lender regulations and offer the federal guaranteed loan program as well.

 The UNC policy states that: ““Campuses and university associated entities shall not enter into any exclusive agreement with a student lender through the Federal Family Educational Loan Program, the William D. Ford Direct Lending Program, or for a private educational loan expressly for postsecondary educational expenses. Campuses with an existing exclusive agreement with the federal government shall work with the Department of Education to amend the agreement to permit participation in both the William D. Ford Direct Lending Program and Federal Family Education Loan Program.” 

Though intended as a movement towards better student services and ethical business, UNC system schools now must offer students loans through at least two lenders in the guaranteed loan program, in addition to offering their previous direct program loans. Rather than assisting the federal loan programs overall, however, critics argue that the direct loan programs will ultimately suffer when pitted against the guaranteed loan programs.  

UNC officials remain steadfast that they mean no harm to direct lending, and their intent in enforcing such regulations is in the best interests of students. 

 Source: Lederman, Doug. “Accidentally Into Loan Wars.” www.insidehighed.com. Posted: July 17, 2007.