Maryland colleges are praising new regulations on the student-loan industry that the U.S. Department of Education proposed last week, saying they will bring clarity to the sometimes murky relationship between student lenders and financial aid officers.

“Anytime you put [in] regulatory language, it gives people the comfort zone to say, ‘Now I know what I’m doing.’ We haven’t had that comfort zone,” said Sarah Bauder, director of financial aid for the University of Maryland, College Park. “[It’s] good [that] the department finally put out regulatory language.”

The 225-page document was released Friday, amid a national probe of the $85 billion-a-year college-loan industry launched by New York Attorney General Andrew Cuomo.

“It will take time to examine these proposals in detail, but Johns Hopkins certainly welcomes the education department’s efforts in this area, particularly in the standards for construction of recommended lender lists,” Johns Hopkins University spokesman Dennis O’Shea said.

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Colleges’ preferred lender lists, used by financial aid officers to recommend lenders to students, have taken center stage in Cuomo’s investigation after it was revealed that some financial aid officers are receiving financial rewards in return for recommending loan providers to students. Hopkins’ director of financial aid recently resigned over allegations that she accepted more than $100,000 from one of the school’s preferred lenders.

Under the proposed federal regulations, colleges would have to disclose to students how they selected recommended lenders. Lenders would be prohibited from offering payments to colleges, and colleges would be prohibited from recommending lenders that have offered payments.

The proposed regulations also would require colleges to include at least three lenders that are not affiliated with each other on their preferred lender lists.

The proposed regulations come almost two weeks after Ellen Frishberg, director of student financial services at Hopkins, resigned. Since reports about Frishberg surfaced in April, Hopkins has adopted a code of conduct to govern relationships between universities and student-loan companies.

mmcilroy@baltimoreexaminer.com