Three financial aid directors began raising eyebrows in early April when reporters uncovered that the officials had recommended Student Loan Xpress, a for-profit company that provides student loans, to their prospective students after personally investing in the company, and profiting heavily from it. Other reports of possible "conflicts of interest" have shown some college officials to receive "kickbacks" or financial rewards from certain lenders for their recommendation.
These lenders are part of a multi-billion dollar industry. "Last year, according to the College Board, students took out $85 billion in loans," reported Jonathon D. Glater of the New York Times in the April 5 article "College Officers Profited by Sale of Lender Stock."
"Students rarely comparison shop and often rely on the preferred lenders list recommended by universities to take out a loan. Sometimes, only a handful of companies make the list," wrote Glater.
Though Davidson has eliminated loans from its financial aid package, the college still has a list of "preferred lenders" for students ineligible for financial aid who would prefer to take loans as a way to finance their education. However, there are absolutely no financial ties between those preferred lenders and Davidson College employees or trustees.