To gauge what a year of scandal has done to the student loan business, look no farther than the Web site of Pennsylvania's Dickinson College.
Its financial aid page now spells out, point-by-point, the arrangements between private lenders and colleges nationwide that were targeted last year by New York State Attorney Gen. Andrew Cuomo. Typed in bold beneath each point is language assuring prospective students and others that Dickinson neither employed those practices nor accepted anything improper from a lender.
"We just wanted to assure our constituencies that the college only acted in good faith," said Robert Massa, Dickinson's vice president for enrollment and college relations.
Such gestures are a legacy of probes by Mr. Cuomo and others of arrangements that included lending companies paying colleges to get on preferred lender lists and, in some cases, financial aid officers profiting from those deals.
"What we learned was that many schools were creating these preferred lists not by looking at what lender was best but rather by looking at which lender was paying them the most," said Benjamin Lawsky, special assistant to the attorney general who spearheaded the national investigation.
Typically, payments by lenders in return for campus business were plowed back into financial aid, so students still benefited, school officials said. Besides, they argued, those lenders generally provided better rates and service.
Even so, public confidence was shaken by several instances in which campus officials appeared to have benefited.
In one that made headlines, the University of Texas at Austin dismissed a financial aid director who had stock in a loan company and was alleged to have been supplied steady quantities of wine and tequila. A student financial services director at Johns Hopkins University resigned after revelations that she accepted $65,000 in consulting fees and tuition payments from a lender she helped promote.
Beyond a string of settlements with lenders and schools, some observers say the scrutiny yielded something more important to the rapidly growing but loosely regulated arena of private lending to students: A code of conduct that was developed by Mr. Cuomo and adopted as law in New York state may now be copied nationwide.
Among other things, the code says schools must not accept anything of value in return for giving a lender an advantage in reaching students. It also says campus employees cannot accept lender-paid travel or other items beyond nominal value.
"What Andrew Cuomo has succeeded in doing is providing some clarity in establishing principles for what is and isn't appropriate," said Mark Kantrowitz, the Cranberry-based publisher of a financial aid information Web site, FinAid.org.
Still, are families likely to get a better loan deal now that lenders and schools have been put on notice about relationships that become too cozy?
At minimum, it should raise a student's confidence that his school's financial aid office "does not have a conflict of interest that might steer that student to a particular lender," said Robert Shireman, founder and president of the Institute for College Access and Success, a non-profit policy and research organization based in Berkeley, Calif. He also is executive director of its Project on Student Debt.
But even as Mr. Lawsky touted what he called the "cleaning up of preferred lender lists at colleges," his office was expressing concern on a new front: Growth in direct marketing by lenders to students and their families, some of it unethical.
Meanwhile, some college officials say the unintended consequence of Mr. Cuomo's probe and others may be that campuses will shy away from agreements that, on the whole, benefited students.
Under U.S. Department of Education guidelines announced last fall, a lender can no longer enjoy status as a school's sole preferred lender. Those lists must include at least three firms. Agreements enabling a lender to use a college's name and logo in marketing loans are being discontinued at dozens of schools following an agreement announced by Mr. Cuomo in December.
"If lenders aren't motivated to offer a good deal to schools that put them on preferred lists, then rates, certainly origination fees, will rise," Dr. Massa said. "I do think that in the long run, students are going to be hurt by this."
The College Board, citing changes in the regulatory landscape, announced in August that it was ending its role as a lender in the Federal Family Education Loan Program.
Many schools said they were unfairly cast by actions of a small subset of peers. Even those who applaud the various investigations say families should not forget that financial aid offices remain a good source of objective help.
"Most of the colleges out there, even those that got involved in these sorts of [agreements], were still focused on what's best for the student," Mr. Kantrowitz said.
On balance, he added, "Schools are going to give you good advice."
Dr. Massa said Dickinson was never accused of wrongdoing. Its only contact from Mr. Cuomo was the same letter of inquiry mailed to 400 or so other schools last spring.
He said Dickinson was included because it used a single preferred lender, PNC Bank, which handled 87 percent of its campus loan volume.
He said PNC paid nothing to his school. The bank was chosen over other lenders in a competitive bid process based on factors, including the absence of origination fees.
Dr. Massa said his school may opt to create an expanded list of preferred lenders but for now will simply have no preferred list. Students will be largely on their own in navigating the market.
It's no secret why the private lenders are so interested in higher education.
At $85 billion a year, student debt is a growth industry. Two-thirds of four-year college students take loans, says the College Board, and with tuition rising faster than government subsidies, private lenders have moved in to narrow the gap.
Their loans to students and parents now represent 20 percent of total education loan dollars, up from 5 percent a decade ago.
An early focus of Mr Cuomo's investigation was agreements under which lenders, including California-based Education Finance Partners, paid colleges a commission based on loans it made. In April, EFP agreed to end the practice with 60 schools, including Duquesne University. Duquesne announced that it would cease accepting commissions from two other lenders, PNC and Citizens banks.
In all, Mr. Cuomo has settled with a dozen loan companies, including the eight biggest lenders in the United States. Some of those firms and several campuses agreed to contribute $13.7 million to a fund to educate student borrowers.
About a dozen schools agreed to reimburse $3.4 million collectively to students.
In December, there was another Pittsburgh connection as Mr. Cuomo settled with a Clearwater, Fla.-based student loan consolidation company, Student Financial Services Inc. It had been paying some of the nation's most visible universities, athletic departments and sports marketing firms for generating loan applications.
The company had contracts at 63 colleges nationwide, including the University of Pittsburgh.
The firm, which agreed to end the arrangements, had paid to use school names, team names, colors, mascots and logos to advertise their loans directly to students.
This "co-branding was intended to imply that the company was the official lender of the school, or that it was actually a part of the school," Mr. Cuomo asserted.
With mailings and other direct pitches on the rise, Mr. Lawsky said families should think carefully before signing up for a school loan. "Treat your student loan like it's a mortgage, take it that seriously," he said. "You wouldn't sign up for a mortgage on your home based on a letter you get."
Bill Schackner can be reached at firstname.lastname@example.org or 412-263-1977.