With so many campus controversies of late, from the alleged misappropriation of college funds by some leaders to the alleged kickbacks from student loan providers to some financial aid officials, the role of board of trustee members comes into question.
The conservative Washington-based think tank, American Enterprise Institute for Public Policy Research, examined that role at a conference Wednesday. During a panel discussion titled, “Why All the Scandal,” industry experts examined the reasons scandals have occurred and why trustee members should be more vigilant.
In recent years, campus controversies pertaining to misappropriated funds and seedy partnerships have gained national attention.
In 2005, American University President Benjamin Ladner resigned amid accusations that he had misused funds for personal expenses. Last year, student loans scandals at numerous schools raised concerns that higher education administrators were receiving kickbacks for steering students toward particular lenders. Earlier this month, former Texas Southern University President Priscilla Slade pleaded no contest to a charge alleging she spent university money inappropriately. Slade agreed to repay the school more than $127,000.
In the case of college presidents, the competitive climate of higher education to get the highest rankings, the most donations, the biggest grants and the best faculty can encourage poor fiscal judgment, one expert noted.
Creating new revenue streams has become an integral component of fundraising as institutions attempt to compensate for shrinking state budgets. As a result, colleges and universities build relationships with companies, such as steering business to preferred student loan providers to alleviate costs.
The relationship between institutions and student loan lenders can be best described as “unsavory,” when looking at the financial benefits or “kickbacks” universities receive as a result of partnering with lenders, says Benjamin Lawsky, senior vice president and counselor of the U.S. Chamber of Commerce.
