Johns Hopkins University
Financial Aid Code of Conduct and Policy on Education Loans
November 2008

Preamble

This code of conduct applies to all university divisions and to all trustees, employees, officers and agents of the university, including without limitation individuals who are employed in a financial aid office or who otherwise have responsibilities with respect to education loans. This code reiterates and reflects the university's continuing commitment to conducting financial aid practices with integrity, free from conflicts of interest, in the interest of students, and in compliance with applicable law.

Definition

For purpose of this code of conduct, lending institution means:

(a) Any entity that itself or through an affiliate engages in the business of making loans to students, parents or others for purposes of financing higher education expenses or that securitizes such loans; or

(b) Any entity, or association of entities, that guarantees or services education loans; or

(c) Any industry, trade or professional association that receives money from any entity described above in subsections (a) and (b).

I. Prohibition on Revenue Sharing with Lending Institutions and on Solicitation or Acceptance of Remuneration or Assistance from a Lending Institution

The university prohibits any revenue-sharing arrangement with any lending institution. Revenue sharing is any arrangement by which a lender pays the university a percentage of the principal loan taken by a borrower or otherwise compensates the university as a result of a borrower taking a loan.

The university may not accept or solicit anything of value from any lending institution related to its education loan activity. This prohibition shall include, but not be limited to, (i) revenue sharing by a lending institution with the university, (ii) the university's receipt from any lending institution of any computer hardware for which the university pays below-market prices and (iii) printing costs or services.

The university also may not accept or solicit staffing assistance from a lending institution, including but not limited to call center staffing or financial aid office staffing. The university shall ensure that it does not identify any employee or other agent of a lending institution to students or prospective students of the university or their parents as an employee or agent of the university.

II. Ban on Opportunity Loans

The university shall not arrange with a lending institution to provide any opportunity loans, if the provision of such opportunity loans prejudices any other borrower.

The university also may not accept or solicit any funds to be used for private educational loans or opportunity pool loans in exchange for providing a lending institution with a specified number of federal loans, a specified loan volume or a preferred lender arrangement.

For purpose of this code, an opportunity loan agreement is an arrangement whereby a lending institution agrees to make loans up to a specified aggregate amount to students with poor or no credit history, or to international students whom the lending institution claims would not otherwise be eligible for its loan programs, in exchange for concessions or promises by a university that may prejudice other borrowers.

III. Ban on Actions that Limit a Borrower's Choice of Lending Institutions

The university shall not assign a first-time borrower to a particular lender, or refuse to certify, or delay certification, of any loan based on the borrower's selection of a lending institution.

IV. Prohibition on Gifts and Remuneration to University Employees

The university shall inquire and ensure that no officer, trustee, director, employee, or agent of the university solicits or accepts gifts or anything of more than de minimus value on his or her own behalf or on behalf of another from or on behalf of a lending institution, except that this provision shall not be construed to prohibit any officer, trustee, director, employee, or agent of the university from conducting non-university business with any lending institution. Nothing in this provision or otherwise shall prevent the university from holding membership in any nonprofit professional association. This prohibition shall include, but not be limited to, any ban on any payment or reimbursement by a lending institution to a university employee for lodging, meals, or travel to conferences or training seminars.

For purpose of this code, "gifts" include any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimus amount, including services, transportation, lodging, and meals. A gift does not include standard materials, activities or programs related to a loan being provided; favorable terms, conditions or borrower benefits provided to a student employed by the university if comparable terms are provided to all students of the university; philanthropic contributions to an institution unrelated to education loans; or state education grants, scholarships or financial aid funds.

V. Limitations on University Employees Participating on Lender Advisory Boards

The university prohibits any officer, trustee, director, employee, or agent of the university from receiving any remuneration for serving as a member or participant of an advisory board of a lending institution, or receiving any reimbursement of expenses for so serving, provided, however, that participation on advisory boards that are unrelated in any way to higher education loans shall not be prohibited by the code. Notwithstanding the above, neither this paragraph nor Part IV of this code of conduct shall prohibit any officer, trustee, director, employee, or agent of the university, who is uninvolved in the affairs of the university's financial aid office, from serving on a board of directors of a publicly traded or privately held company.

VI. Prohibition on Consulting for Lending Institutions by Financial Aid Officers and Other Employees or Officers who have Student Lending Responsibilities

Individuals employed in a financial aid office and other employees or officers who otherwise have student lending responsibilities are prohibited from consulting or providing other contract services for a lending institution. This article does not prohibit a financial aid officer from consulting for, or serving on advisory board constituted by, the federal government consistent with the university's Policy on Conflict of Interest and Conflict of Commitment and federal law.

VII. Prohibition on Stock Ownership in Lending Institutions by Financial Aid Officers

A person employed as a financial aid officer of the university shall not own stock or hold any another financial interest in a lending institution, other than through ownership of shares in a publicly traded mutual fund or similar investment vehicle in which the person does not exercise any discretion regarding the investment of the assets of the investment vehicle.

Return of Title IV Funds Policy

The Financial Aid Office is required by federal statute to recalculate federal financial aid eligibility for students who withdraw, drop out, are dismissed, or take a leave of absence prior to completing 60% of a payment period or term. The federal Title IV financial aid programs must be recalculated in these situations.

If a student leaves the institution prior to completing 60% of a payment period or term, the financial aid office recalculates eligibility for Title IV funds. Recalculation is based on the percentage of earned aid using the following Federal Return of Title IV funds formula:

• Percentage of payment period or term completed = the number of days completed up to the withdrawal date divided by the total days in the payment period or term. (Any break of five days or more is not counted as part of the days in the term.) This percentage is also the percentage of earned aid.

Funds are returned to the appropriate federal program based on the percentage of unearned aid using the following formula:

• Aid to be returned = (100% of the aid that could be disbursed minus the percentage of earned aid) multiplied by the total amount of aid that could have been disbursed during the payment period or term.

If a student earned less aid than was disbursed, the institution would be required to return a portion of the funds and the student would be required to return a portion of the funds. Keep in mind that when Title IV funds are returned, the student borrower may owe a debit balance to the institution.

If a student earned more aid than was disbursed, the institution would owe the student a post-withdrawal disbursement which must be paid within 120 days of the student's withdrawal.

The institution must return the amount of Title IV funds for which it is responsible no later than 30 days after the date of the determination of the date of the student's withdrawal.

Refunds are allocated in the following order:

• Federal Direct Graduate PLUS Loans
• Federal Direct Unsubsidized Loans
• Federal Direct Subsidized Loans
• Federal Perkins Loans

Leave of Absence/Advanced Studies Program/Withdrawal

Students who make a request to the Dean of Student Affairs and/or the Registrar’s Office for a Leave of Absence, Advanced Studies Program or withdrawal status, and have received financial aid funding, must also notify the Financial Aid Office of this request for change in status. As a result of the change, the student may be required to return funds and will be billed for any amount owed. 

An institutional aid recipient, who withdraws from a given term and has their tuition prorated, will also have their institutional aid adjusted to match the proration percentage of their tuition rate. To view the tuition refund schedule, please visit the SOM Registrar’s website.

We ask that students inform the Financial Aid Office of their intentions to prevent any undue financial burden that may occur because of the change in status.

For specific information, please contact Student Affairs.

Student Rights and Responsibilities

You have the right to:

• Privacy and confidentiality of records.
• Be notified of any changes in your aid and the reason for the change.
• Ask for an explanation of anything you don’t understand.

You have the responsibility to:

• Read, understand, and keep copies of all financial aid documents.
• Notify our office of any changes in your family’s financial status.
• Notify us of any change in your attendance status, name, or address.
• Notify us of any outside awards you receive.
• Comply with the terms of your student loans.
• Stay informed about deadlines and procedures – read any correspondence you receive from our office.