Baylor Statement About Education Finance PartnersApril 13, 2007
There have been several recent news reports concerning Education Finance Partners (EFP), a major student loan company that maintains "revenue-sharing" agreements with a large number of colleges and universities nationally. Because Baylor has had a relationship with this loan provider since March of 2006, the University's name has been included in various publications reporting on the lending practices of EFP. The following information describes Baylor's relationship with EFP and the University's preferred lender list.
As a service to families, Baylor, like most institutions around the country, maintains a list of preferred lenders based on service quality and capacity to help students and their families negotiate the complexities of borrowing. Baylor does not require students and their families to select a lender from the preferred list, nor does the university suggest which lenders families should use.
The most recent preferred lender list includes 19 lenders for government-subsidized loans and eight lenders for alternative or private loans. It was established by an open RFP process and scored by a nine-member University committee who reviewed 35 submissions from lenders on the basis of customer service to students and staff, borrower benefits and pricing, default aversion, loan delivery flexibility, diversification, value added products, and life of loan servicing. Education Finance Partners was rated highly by the committee. It should be noted that EFP is the only outside lending institution on the preferred lender list that provides any revenue sharing to Baylor.
Baylor's contractual agreement with Education Finance Partners provides for a small portion of EFP's revenue to be returned to Baylor. The agreement also requires EFP to disclose, in its Truth in Lending Statement, the existence of this relationship. The University directed that these funds be used exclusively for the purpose of need-based scholarship aid. It has been one year since Baylor first signed the contract with EFP, and the University has received a total of $4,207.48 from EFP in the form of shared revenue.
To conform with recently established best practices, Baylor is being proactive in its agreement with EFP. Baylor has reversed its revenue-sharing arrangement with EFP and will return the funds it has received to Baylor students who borrowed from EFP. University administrators also have met with staff to ensure that no person employed by the University has benefited personally from Baylor's relationship with EFP.
The financial aid professionals at Baylor maintain a consistently high level of personal and professional integrity in their dedicated service to our students and their families. Baylor is proud of the work of all its financial aid staff and are committed to helping students from all financial backgrounds achieve their dream of gaining a Baylor education.