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PHILOSOPHY AND PURPOSE OF ACM
STUDENT FINANCIAL AID
AND
OUR OFFICE CODE OF CONDUCT

ACM’s philosophy of student aid is to provide access and choice to students, who without such assistance would not be able to attend an institution of higher learning. ACM’s Vision and Mission statements support this philosophy.

In addition, ACM has as one of its goals to provide financial access to a college education by assuring reasonable tuition rates, comprehensive financial assistance, and college scholarship opportunities.

The Student Financial Aid Office was established in August 1961 to coordinate all student financial assistance offered to students of the college. The main purpose of Allegany College of Maryland’s student financial aid program is to make it possible for the greatest number of students, regardless of their financial circumstances, to continue their education. Currently, more than seventy percent of all enrolled students at Allegany College of Maryland receive some form of financial aid.

This office adheres to the following three principles concerning student financial assistance.

First, the student’s parents, if the student is dependent, are expected to contribute to the student’s college education according to their means, taking into account their income, assets, number of dependents, and other relevant information. Independent students and dependent students themselves are expected to contribute from their own assets and earnings, including borrowing against future earnings. The establishment of the Federal Title IV Student Aid Programs is for the express purpose of providing financial assistance to low income students and families who would not otherwise be able to pursue a college education. It is important for students and families to remember that although these programs are available to assist them, they were not developed or intended to bear the full financial responsibility of funding post-secondary education. Financing of post-secondary education is the responsibility of the students and the families. The Federal Student Aid Programs are designed to assist them in meeting these costs.

Second, financial aid is offered only after determining that the resources of the family are insufficient to meet the student’s educational expenses. The amount of aid offered will not exceed the amount needed to meet the difference between the student’s total educational expenses and the family’s total resources.

Last, Allegany College of Maryland reviews its financial assistance awards annually and adjusts them to reflect changes in the financial needs of students and the expenses of attending Allegany College of Maryland. This philosophy supports the following goal adopted by the Allegany College of Maryland Board of Trustees: “To provide financial access to a college education by assuring reasonable tuition rates, comprehensive financial assistance, and college scholarship opportunities.”

GENERAL ASSUMPTIONS

Allegany College of Maryland’s Student Financial Aid Office utilizes the Institutional Student Information Record (ISIR) to analyze a student’s financial need. A federally mandated need analysis formula is designed to serve as a national standard objective measurement of the ability to pay for higher education. ACM, along with other colleges and universities throughout this nation, is committed to insuring that this formula provides a national yardstick by equitably analyzing what a given family is able to pay and to ensure that the formula does not become a rationing devise contingent upon budget allocations and other external factors.

A major assumption of the formula is that parents of dependent students have an obligation to finance the education of their children to the extent that they are able. In analyzing the family’s financial strength, both the family’s income and assets, if required in the formula, are considered to produce the most complete index of the family’s ability to pay for post-secondary education at Allegany College of Maryland.

Another major assumption of the federal formula is that the size of the family and extraordinary expenses that the family may have must be considered in order to measure the true ability of the family to contribute to educational costs. So, too, will factors such as age of the parents, provision for retirement, and the number of working parents – which alter a family’s financial strength, be considered.

The need analysis formula assumes that the student also has an obligation to share the responsibility for meeting the cost of higher education. This obligation is reflected through a systematic expectation of contributions from a student’s own savings, employment income, and other resources or benefits.

A general assumption in the formula is that the student and the family must be accepted in their present financial condition. Any system that analyzes financial need must first deal with objective facts of the family financial circumstances. It cannot and does not make distinctions between the frugal and the spend-thrifty.

An objective system of financial need analysis must treat all families equitably, recognizing the peculiarities of each family’s situation to the greatest extent possible, at the same time fully recognizing that many expenses and expenditures are not a matter of family choice. On the other hand, a need analysis formula should not make adjustments in its estimate of financial strength because of the difference in family situations that result from family choice.

Financial assistance at Allegany College of Maryland is accomplished by:

1. determining the financial need;
2. meeting this need through a combination of grants, scholarships, and/or employment; and
3. suggesting one of our many loan programs.

A student is expected to make a reasonable contribution to his/her educational expenses by means of summer employment and past savings, as well as incurring loans and obtaining on/off campus employment.

MARYLAND’S CODE OF CONDUCT AND THE NASFAA STATEMENT OF ETHICAL PRINCIPLES

The primary goal of the financial aid professional is to help students achieve their educational potential by providing appropriate financial resources. To this end, the ACM Student Financial Aid Office will abide by the College Loan Code of Conduct adopted by the State of Maryland under the direction of Attorney General, Douglas Gansler, on June 13, 2007. In addition, we will adhere to the Statement of Ethical Principles and the Code of Conduct from the National Association of Student Financial Aid Administrators, adopted in April 1999 and amended in May 2007:

College Loan Code of Conduct adopted by the State of Maryland under the direction of Attorney General, Douglas Gansler on June 13, 2007:

1. Revenue Sharing Restrictions: Colleges may not receive anything of value from any lending institution in exchange for any advantage sought by the lending institution. Lenders cannot pay to get on a school’s preferred lender list.
2. Gift and Trip Restrictions: College employees may not take anything, including trips, of more than nominal value from any lending institution, when such things are offered in connection with the employees’ financial aid work.
3. Advisory Board Compensation Rules: College employees with responsibilities for financial aid work may not receive anything of value for serving on the advisory board of any lending institution.
4. Preferred Lender Guidelines: College preferred lender lists must be based solely on the best interests of the students who may use the list without regard to financial interests of the college.
5. Preferred Lender Disclosure: On all preferred lender lists the college must clearly and fully disclose the criteria and process used to select preferred lenders. Students must also be told that they have the right and ability to select the lender of their choice regardless of the preferred lender list.
6. Loan Resale Disclosure: Colleges may not permit a lender to appear on a preferred lender list unless the lender agrees to disclose to the student at the time of the loan any pre-existing agreements to sell the loan to another lender.
7. Call Center Restrictions: Colleges may not permit employees or agents of lenders to identify themselves to students as employees of the colleges. No employee or agent of a lender may be employed by a college financial aid office.

Statement of Ethical Principles and the Code of Conduct from the National Association of Student Financial Aid Administrators, adopted in April 1999 and amended in May 2007:

The Financial Aid Professional shall:

1. Be committed to removing financial barriers for those who wish to pursue postsecondary learning.
2. Make every effort to assist students with financial need.
3. Be aware of the issues affecting students and advocate their interests at the institutional, state, and federal levels.
4. Support efforts to encourage students, as early as the elementary grades, to aspire to and plan for education beyond high school.
5. Educate students and families through quality consumer information.
6. Respect the dignity and protect the privacy of students, and assure the confidentiality of student records and personal circumstances.
7. Assure equity by applying all need analysis formulas consistently across the institution's full population of student financial aid applicants.
8. Provide services that do not discriminate on the basis of race, gender, ethnicity, sexual orientation, religion, disability, age, or economic status.
9. Recognize the need for professional development and continuing education opportunities.
10. Promote the free expression of ideas and opinions, and foster respect for diverse viewpoints within the profession.
11. Commit to the highest level of ethical behavior and refrain from conflict of interest or the perception thereof.
12. Maintain the highest level of professionalism, reflecting a commitment to the goals of the National Association of Student Financial Aid Administrators.

Code of Conduct for Institutional Financial Aid Professionals

An institutional financial aid professional is expected to always maintain exemplary standards of professional conduct in all aspects of carrying out his or her responsibilities, specifically including all dealings with any entities involved in any manner in student financial aid, regardless of whether such entities are involved in a government sponsored, subsidized, or regulated activity. In doing so, a financial aid professional should:

Refrain from taking any action for his or her personal benefit.

Refrain from taking any action he or she believes is contrary to law, regulation, or the best interests of the students and parents he or she serves.

Ensure that the information he or she provides is accurate, unbiased, and does not reflect any preference arising from actual or potential personal gain.

Be objective in making decisions and advising his or her institution regarding relationships with any entity involved in any aspect of student financial aid.

Refrain from soliciting or accepting anything of other than nominal value from any entity (other than an institution of higher education or a governmental entity such as the U.S. Department of Education) involved in the making, holding, consolidating or processing of any student loans, including anything of value (including reimbursement of expenses) for serving on an advisory body or as part of a training activity of or sponsored by any such entity.

Disclose to his or her institution, in such manner as his or her institution may prescribe, any involvement with or interest in any entity involved in any aspect of student financial aid.

Adopted by Board of Directors, May 2007

Explanation of the Code of Conduct

As previously noted, financial aid professionals work within vastly differing institutional environments and share decision-making authority regarding financial aid policy, practices, and procedures. NASFAA strongly encourages each financial aid professional to engage his or her institutional colleagues so that there is common understanding regarding the conduct of their respective obligations. To facilitate this exchange, NASFAA has provided the following explanation of the elements of the Code of Conduct:

1. “Refrain from taking any action for his or her personal benefit.”
   While performing one’s work in an exemplary fashion should result in “personal benefit” in the form of professional advancement and recognition, this provision obviously relates to actions that are contrary to the obligations the individual has to the institution and its students and their parents. This includes the individual, or a member of their family, never accepting cash payments, stocks, club memberships, gifts, entertainment, expensepaid trips, or other forms of inappropriate remuneration from any business entity involved in any aspect of student financial aid. It also relates to actions which, while on balance may be supportive of the financial aid professional’s work, are chosen from among alternatives because they also benefit the financial aid professional.

2. “Refrain from taking any action he or she believes is contrary to law, regulation, or the best interests of the students and parents he or she serves.”
   The statement – never taking action contrary to law or regulation – should be self-evident. However, note the use of the term “believes to be contrary to law [or] regulation.” The financial aid professional works in a complex legal environment. Any doubts as to whether a course of conduct is legally proper should be resolved by referring the matter to the institution’s legal advisors for guidance. In addition, the individual should understand and adhere to all institutional policies as well as other local, state or federal requirements that are applicable to his or her conduct or job performance.

3. “Ensure that the information he or she provides is accurate, unbiased, and does not reflect any preference arising from actual or potential personal gain.”
   When providing information, at all times the key should be transparency. Students and parents should be able to fully understand their rights, obligations, and – of paramount importance – their alternatives. Applying these principles to the use of “preferred lender” lists is instructive. If an institution elects to provide such a list, a financial aid professional is expected to demonstrate transparency, completeness, and accuracy of information by ensuring that:

   • Students and their parents understand they are not required to use any of the lenders on a “preferred lender” list, are free to select the lender of their choice, and understand the process for selecting a lender and applying for a loan;
   • The school will promptly certify any loan from any lender selected by a borrower;
   • The process through which “preferred lenders” are selected is fully disclosed;
   • Borrowers are provided with consumer information about the loan products offered by entities on a school’s “preferred lender” list. Such information must include the disclosure of competitive interest rates, terms, and conditions of federal loans; high quality loan servicing; or additional benefits beyond the standard terms and conditions for such loans.
   • The process through which students execute Master Promissory Notes preserves a student’s right to select the lender of his or her choice;
   • Lenders who are included in a “preferred lender” list disclose agreements to sell their loans to other entities; and
   • The selection of lenders for inclusion on a “preferred lender” list is based solely on the best interests of the students and parents who may rely on such a list.
     
     
4. “Be objective in making decisions and advising his or her institution regarding relationships with any entity involved in any aspect of student financial aid.”
   Financial aid professionals must always be fair-handed when recommending or entering into a business relationship with any entity offering a product or service related to financial aid. A lender may not be placed on a school’s “preferred lender” list in exchange for a prohibited inducement. Placement on a “preferred lender” list, therefore, must not be based on benefits provided to the institution, an employee of the institution, or its students in connection with loans not covered by such list. In the same light, financial aid professionals should not arrange for alternative (i.e., non-federal or “opportunity”) loan programs that disadvantage students or parents who do not receive such loans.
   Transparency also requires that when a student or parent has communication with what he or she believes to be the institution’s financial aid office that is precisely what should occur; no employee or agent of a lender should ever be identified, either directly or by implication, as an employee or agent of the institution.

5. “Refrain from soliciting or accepting anything of other than nominal value from any entity (other than an institution of higher education or a governmental entity such as the U. S. Department of Education) involved in the making, holding, consolidating or processing of any student loans, including anything of value (including reimbursement of expenses) for serving on an advisory body or as part of a training activity of or sponsored by any such entity.”
   The first element in the Code of Conduct prohibits the conflict of interest that arises when one acts for personal gain. This fifth element is intended to avoid the appearance of conflict of interest that arises when a financial aid professional accepts benefits from a lending institution or similar entity. The fact that the financial aid professional may have no intention to provide an advantage to the lender as a result of the benefit he or she receives, and indeed does not provide any such advantage, is not the point. The benefit received by the financial aid professional creates an appearance that he or she may not be impartial, and may not be acting solely in the best interests of the students and parents he or she serves. In our profession such an appearance can do great harm, and it must be strictly avoided.
   The term “nominal value” leaves some room for interpretation. This is intentional: many states and institutions have laws and policies that regulate such activities, and it is common for such laws and policies to define with specificity what is meant here by “nominal value.” As a general guide, and subject to more restrictive laws and policies, a total retail value of not more than $10 should be considered reasonable. The last component of this element of the Code deals with reimbursement for travel and expenses incurred when serving on lender advisory boards or attending lender-sponsored training activities. There is certainly value in providing lenders with the unique expertise and perspective that only financial aid professionals can provide, but receiving any remuneration for such service, even if only in the form of reimbursement for expenses, creates the appearance of conflict that must be avoided. The same principle applies to reimbursement for lender-sponsored training activities. Professional development is a key component of being an effective financial aid professional, and attending lender sponsored training programs can be a valuable way of obtaining the most current information. Again, however, receiving any remuneration for such attendance from a source other than his or her institution, even in the form of reimbursement for expenses, creates the same impermissible appearance of conflict of interest, and must be avoided.

6. “Disclose to his or her institution in such manner as his or her institution may prescribe any involvement with or interest in any entity involved in any aspect of student financial aid.”
   The same principle of transparency, or avoiding the appearance of conflict of interest, drives this element of the Code. Every institution has a written policy on disclosure of potential conflicts of interest, and a process of determining whether an employee’s involvement creates an actual conflict of interest or the appearance of a conflict. It is the obligation of the financial aid professional to strictly abide by the requirements of his or her institution’s conflict of interest policy, particularly with regard to any activities, involvement, investment, or interest in any financial aid-related entity. Institutional conflict of interest policies typically describe the nature of investments that require disclosure and review, generally excluding interests held by mutual funds or below a certain minimum value. As a practical matter, financial aid professionals should avoid any investment in or financial relationships with lenders and similar entities.

   These principles should apply throughout the administration of the programs for which the financial aid professional is responsible, including Direct Loans, FFELP, and loans originated under the School as Lender program.

   There should never be any difference between “ethical” and “best” practices. The ethical practice is the best practice. As an organization, NASFAA unequivocally supports the principles and practices described in this Statement. When a practice or policy arises that appears in conflict with these principles, it is the obligation of the financial aid professional to bring this to the attention of those responsible within his or her institution, and to seek a resolution consistent with these principles.

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