Case 4.6 : The Student-Loan and financial-Aid Officers with Stock Options (Part I*)

In 2002, the founders of Student Loan Xpress said they intended to get a bigger share of student loan market by “market[ing] to the financial aid offices of schools”. Some of universities have fired their top financial aid administrators after they discovered that the admins had conflict of interest to the lending companies they had listed as “preferred lenders” for the students attending their instutions.

Some others have reached settlement with law enforcement officials on loan kickback arrangements.

Part of the agreements, in which the universities admitted no wrongdoing, requires the schools to refund $3,17 million to the students because of revenue sharing agreements.

So, in this case, there was an ethical behavior that the admins did. They use their position in the universities to take the advantages from the student loan, they try to get big share with this unethical action. Some of them were fired and some others also had to paid some refunds to provide training for students on the student loan industry and their options.

*part II and part III will be reviewed by Aulia Hidayat and Zulfan Juliansyah