Drexel's Loangate, it just won't go away
By: Robert Zaller
Issue date: 6/8/07 Section: Ed-Op
Originally published: 6/8/07 at 4:07 AM EST
Last update: 6/8/07 at 4:08 AM EST
Originally published: 6/8/07 at 4:07 AM EST
Last update: 6/8/07 at 4:08 AM EST
News flash: the National Association of Student Financial Aid Administrators now says that "it would be inappropriate for a school to place a lender on a preferred lender list in exchange for shares of stock." That must have been a difficult ethical call.
What do we know of Drexel's relations with its own preferred lender, Education Finance Partners? Precious little, so far. I know the President spent a good deal of time talking about his favorite subject, university expansion, at his "Town Hall" meeting with students on May 21. I am sorry indeed that a conflicting event of my own prevented me from attending. I would have been interested to know whether any questions were asked, and any answers given, on the subject of financial aid. Who negotiated the now-voided revenue-sharing agreement with EFP? Who authorized a private company to use the University logo? Were any other considerations exchanged between Drexel and EFP, or between any Drexel employee and EFP? What policy changes, if any, have been made in the University's lending practices?
Drexel, of course, is only one of dozens - it may yet be hundreds - of institutions caught up in this sordid scandal. It is unique only in being the only one brazen enough to try to defend the indefensible. But there is a larger issue here of which the scandal itself is only a symptom. Demands for student loans have risen - an average of 27% in each of the past six years - as the cost of education at America's 4200 colleges and universities continues to far outstrip inflation. Such education is a necessity in today's economy, yet even mid-level institutions (such as ours) bid up their tuition to Lexus levels; Drexel freshmen alone will pay 18 percent more next year. These hikes are tracked and supported by those in public universities, which have almost wholly abdicated their role in making higher education accessible to the general public. Academia has become a knowledge monopoly, and, like any monopoly with a license to charge what the market will bear, it squeezes those able to pay, and shuts out those who can't.
What do we know of Drexel's relations with its own preferred lender, Education Finance Partners? Precious little, so far. I know the President spent a good deal of time talking about his favorite subject, university expansion, at his "Town Hall" meeting with students on May 21. I am sorry indeed that a conflicting event of my own prevented me from attending. I would have been interested to know whether any questions were asked, and any answers given, on the subject of financial aid. Who negotiated the now-voided revenue-sharing agreement with EFP? Who authorized a private company to use the University logo? Were any other considerations exchanged between Drexel and EFP, or between any Drexel employee and EFP? What policy changes, if any, have been made in the University's lending practices?
Drexel, of course, is only one of dozens - it may yet be hundreds - of institutions caught up in this sordid scandal. It is unique only in being the only one brazen enough to try to defend the indefensible. But there is a larger issue here of which the scandal itself is only a symptom. Demands for student loans have risen - an average of 27% in each of the past six years - as the cost of education at America's 4200 colleges and universities continues to far outstrip inflation. Such education is a necessity in today's economy, yet even mid-level institutions (such as ours) bid up their tuition to Lexus levels; Drexel freshmen alone will pay 18 percent more next year. These hikes are tracked and supported by those in public universities, which have almost wholly abdicated their role in making higher education accessible to the general public. Academia has become a knowledge monopoly, and, like any monopoly with a license to charge what the market will bear, it squeezes those able to pay, and shuts out those who can't.
