In a step toward ensuring students are treated fairly when financing their college education, Attorney General Terry Goddard’s office created the Arizona Student Loan Code of Conduct, released last week.

ASU and 33 other Arizona colleges and post-secondary schools have adopted this voluntary code.

Anne Hilby, press secretary for the attorney general’s office, said the schools should be commended for participating in the code of conduct, which will protect students’ financial interests and well-being.

“Providing our young people with access to quality, affordable higher education is the key to keeping Arizona competitive in the 21st century,” Goddard said in a press release. “To achieve this, students and families must have the information they need to make well-informed decisions about how to pay for school, and college lending practices need to be free of any conflict of interest.”

Craig Fennell, executive director of student financial assistance for the University, said ASU was pleased to partner with the attorney general’s office to craft the code.

“ASU has always operated with the best interest of our students in mind,” Fennell said.

This code will reassure our students and families who borrow loans that ASU does not favor any private lenders.”

The code addresses some of the issues hit upon in the federal Higher Education Opportunity Act of 2008, signed into law in August.

The act grew out of discoveries of conflict of interest between the college loan industry and higher education institutions, particularly in the state of New York.

The Arizona code of conduct exceeds the requirements of the federal act, laying down even stricter requirements than the federal code, Hilby said.

The state code prohibits financial aid employees from receiving reimbursement for travel or other expenses for serving on private lender’s advisory boards and prohibits revenue sharing — schools getting money from a lender based on the amount of loans they receive.

Another aspect of the code pertains to preferred lender lists, which are suggestions of lenders to students that, in the school’s opinion, offer student loan options that are among the best available.

Hilby said the new code assures that these preferred lender lists are in the best interest of the student.

“Preferred lender lists continue to be allowed but with some new guidelines, such as schools must offer more than one lender on any list and schools must plainly state why they selected a lender for their preferred lender list,” Fennell said.

The code of conduct also prohibits lenders from giving gifts to schools, which could take the form of trips to conferences and tickets to sporting or entertainment events.

“The student and family should feel confident there are no undisclosed relationships between the school and the lender," Hilby said.“These relationships have the potential of a lender being given the priority by a school that wouldn’t be in the best interest for the student.”

The Attorney General’s office would neither comment on nor attribute any of these practices to any Arizona higher education institutions, Hilby said.

Reach the reporter at philip.haldiman@asu.edu.