Fin Aid Officers Are Cheap Dates

Documents revealed yesterday by The Daily Texan, the student newspaper of UT Austin, show just how little swag lenders have had to cough up to curry favor with financial aid officers. Preferred lender status in exchange for free Hula Hut Happy Hours? That's quite a return on investment.

As the Wall Street Journal reports:

The University of Texas at Austin's Office of Student Financial Services rated student-loan firms based on "treats" and other meals provided to university officials, school documents show.

In internal reviews of their lists of lenders recommended to students, financial-aid officials rated the loan companies based on loan volume, customer service and whether they offered students reduced fees. But "visibility" was another factor the office cited, which it defined as "based on the number of lunches, breakfasts and extracurricular functions for entire OSFS staff." Lenders on the list were graded on the quality of their culinary largesse by metrics ranging from "very good" to "poor."

Last month, the university put Lawrence Burt, associate vice president and director of student financial aid, on paid leave after it emerged he owned shares of a former parent of Student Loan Xpress Inc., now a unit of CIT Group Inc. Student Loan Xpress was rated "very good" in free meals and functions, according to a school analysis dated March 10, 2006. In an interview last month, Mr. Burt said that there was no connection to his stock ownership and that the company was one of 20 lenders picked for service and benefits. "I did not do anything wrong," he said.

One document titled "Lender Treats," also dated March 10, 2006, listed a "Hula Hut Happy Hour" courtesy of one lender; and a lasagna lunch from another.