Abbott hooks 'Horns to commit to 'fairer' student-lending rules
It looks like there'll be no more party-favored preferred lender lists at the University of Texas.
Texas Attorney General Greg Abbott recently announced he'd reached agreement with UT to prevent university employees from gaining in the future by matching student loan providers with campus borrowers.
The announcement followed the firing last week of UT Associate Vice President Lawrence Burt, the head of the university's financial aid office.
A UT probe found Burt placed a lender he owned stock in at the top of preferred lender lists and judged others based on how many "treats" they gave staffers. He was mentioned in New York Attorney General Andrew Cuomo's original probe of the industry two months ago.
In a carefully-worded statement, Abbott thanked UT "for their cooperation and their commitment to reforms that protect Texas students."
The agreement means UT must now abide by the Attorney General's Texas Higher Education Fair Lending Practices Agreement. Abbott's release calls the Agreement "the nation's most stringent education loan practice controls."
The agreement prohibits financial aid employees from holding a financial interest in student lenders. It also restricts all university employees from serving on any management or advisory group of a student lender and stops lenders from paying to join preferred-lender lists.
The UT probe found that Burt had put a subsidiary of one of his stock interests on top of preferred lender lists "without any apparent justification," UT general counsel Barry Burgdorf told the Houston Chronicle.
Burt also assessed the UT preferred-lender list based on how many treats like barbecue, birthday cakes, candy bars and cookies the lenders gave the UT financial aid office staff.
Abbott's release also praised UT for "voluntarily launching an internal investigation of its student financial services department and disclosing its findings to the Office of the Attorney General."