As a nationwide controversy recently erupted over student loans, state lawmakers are investigating how UW schools may be affected.
State Rep. Gordon Hintz, D-Oshkosh, wrote a letter to fellow lawmakers and state Rep. Steve Nass, R-Whitewater, the chairman of the Committee on Colleges and Universities concerning the ""clouds of suspicion"" around private student loan companies.
""It appears that our student loan system has been set up more to benefit the big banks who make the loans than the students that need them,"" Hintz said.
On a national level, a call to overhaul the college loan system is being lead by New York Attorney General Andrew Cuomo, according to The New York Times.
Cuomo's investigators claim to have found numerous examples where schools and loan companies are benefiting more from loans than the students who need them. Some alleged cases include loan companies providing all-expense-paid trips for college financial aid officers who then steered students to the lenders.
UW-Milwaukee's ties to its lenders are being questioned, according to a report form the Milwaukee Journal Sentinel. The Director of Financial aid at UWM sits on the advisory board of one of the school's preferred lenders, Student Loan Xpress.
There is no university in the country that does more business with Student Loan Xpress than UWM, according to Student Marketmeasure, a New York-based firm that does market research for private lenders.
While UW-Madison has no preferred lenders list, Director of Student Financial Services Susan Fischer said that other schools provide preferred lenders because ""people want some guidance"" and that lender lists could really benefit students and parents if used appropriately.
Meanwhile, Cuomo has established a code of conduct for colleges and lenders that could become a model for federal law due to the amount of attention the investigation has received. The code bans lenders from paying colleges in exchange for being designated a preferred lender and other special treatment.
UW-Madison has not been involved in any cases thus far and according to Fischer has garnered no complaints from parents or students.
Fischer said Madison's financial aid process is ""so squeaky clean it is ridiculous."" However, she did benefit some from the attention the controversy has brought. Fischer said, ""People are looking at their practices, and it never hurts to look at your practices.""
