All of Maryland’s 60-some universities have adopted student loan regulations after a national investigation of the industry revealed some financial aid officers — including one at The Johns Hopkins University — received kickbacks from lenders.

University officials are prohibited from receiving anything of value from lending institutions in exchange for steering students toward those lenders, according to the new code of conduct established by Maryland Attorney General Doug Gansler established.

New York Attorney General Andrew Cuomo’s investigation into the $85 billion-a-year college-loan industry revealed that Ellen Frishberg, director of student financial services at Johns Hopkins since 1989, accepted $100,000 from lenders.

Frishberg, who resigned in May after reports about her accepting perks surfaced, pocketed $65,000 alone from Student Loan Xpress Inc., a lender recommended to students by her office, in the form of consulting fees and tuition payments.

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“It’s a positive that the practices that were going on have come to light and that together, the regulatory authorities and colleges and universities, are addressing it,” said Dennis O’Shea, a Johns Hopkins spokesman.

In the aftermath of the scandal, Hopkins suspended offering students any recommendations on lenders until a “clearer national consensus” on the matter is reached, he said.

Even at financial aid offices where no kickbacks were uncovered, workers are still reluctant to give any advice to students for fear of eliciting any perceptions of impropriety, said Sarah Bauder, financial aid director for University of Maryland, College Park.

Frostburg State University still maintains a list of lenders, but it is compiled based on positive feedback from students who received the best deals, Frostburg spokeswoman Liz Medcalf said.

Student loan code of conduct

» Lenders cannot pay to be placed on a school’s preferred lender list.

» Preferred lender lists must be based solely on the best interest of the students, not the financial interest of the college.

» The college must clearly and fully disclose the criteria used to select preferred lenders.

Source: Maryland Attorney General

kvolkmann@baltimoreexaminer.com