You likely are aware of the recent publicity concerning higher education financial aid/loan practices.

Much of the publicity centers on the investigation undertaken by the New York attorney general, Andrew Cuomo. Mr. Cuomo has expressed concern that some relationships between lenders and schools may be tainted by possible conflicts of interest which have the potential to mislead students and compromise their interests. He also states that he has concerns about the financial arrangements and relationships between lenders and schools, such as revenue sharing and referral fees, particularly those relating to “preferred lender” programs.

Legislation has also recently been introduced in Congress which, if passed in its present form, would place a number of requirements on Universities when they choose lenders for a “preferred lender” list.

At present, no inquiries have been made of Western University with regard to its loan practices. In order to keep you informed, however, Otto Reyer, Director of Financial Aid, and Keith Johnson have developed a series of Questions and Answers about the University s student loan program. These focus on what we believe to be the substantive issues.

Questions Related to Western University of Health Sciences Preferred Lender Lists

Does Western University of Health Sciences maintain Preferred Lender Lists?

Answer: Yes.

What criteria are used by Western University of Health Sciences in selecting lenders to be included in its Preferred Lender lists?

Answer: Lenders are selected by Western University of Health Sciences for its Preferred Lender Lists based solely on what is judged to be in the best interests of the University s students. The Financial Aid Office annually reviews education loan providers programs to determine if their programs are beneficial for the University s students. In the selection process Western University selects lenders based on the following components and percentages:

Does Western University of Health Sciences receive any revenues from lenders who are listed on any University's Preferred Lenders Lists?

Answer: No.

Do any employees of Western University of Health Sciences financial aid office receive any compensation from lenders who are listed on any University s Preferred Lender lists?

Answer: Financial aid employees at Western University do not receive compensation from lenders, guarantee agencies or o ther affiliations related to financial aid. Financial aid employees (and o ther employees of the University) are subject to the University s conflict of interest policy, which requires that all decisions be made solely on the basis of a desire to promote the best interests of the University. Employees are required to disclose the existence of any conflict of interest and are prohibited from participating in decisions which are affected by the conflict of interest. However, the conflict of interest policy does not prohibit employees from receiving benefits of nominal value.

Does Western University of Health Sciences prohibit its employees from receiving remuneration in the form of travel, lodging or meals from lenders on its Preferred Lender Lists?

Answer: Remuneration in the form of travel, lodging or meals is subject to Western University of Health Sciences Conflict of Interest Policy, and any employee who receives remuneration of this description of more than a nominal value is prohibited from participating in any decision to include the lender on any University s Preferred Lender Lists.

Does Western University of Health Sciences allow students to secure loans from other lenders that are not included on any University's Preferred Lender Lists?

Answer: Yes. Students have the right and ability to select the education loan provider of their choice, even though they are not shown on any University's Preferred Lender Lists. The University will process all loans in a timely manner regardless of whether the lender is on any of the University's Preferred Lender Lists.

Questions Related to Loans Made by Western University of Health Sciences under Its School As Lender Program

Does Western University of Health Sciences make direct loans to its students under a School as Lender program?

Answer: Yes.

Why does Western University of Health Sciences make loans to its students?

Answer: Western University of Health Sciences makes a diligent effort to offer loans to its students on terms that are advantageous to the students. Presently, the University offers its students a Stafford loan programs, which eliminates the 3% origination fees and which provides students with an additional interest rate reduction of 2.25% when they start repayment of the loan.

Does Western University of Health Sciences sell the loans it makes under its School as Lender program?

Answer: Yes, these loans are currently purchased from the University by Brazos Higher Education Authority, a Texas Non-Profit Corporation.

Do students maintain their borrower incentives when the loan is sold to Brazos Higher Education Authority?

Answer: Yes, student borrowers maintain their incentives.

Do any employees of Western University of Health Sciences financial aid office receive any compensation from Brazos Higher Education Authority?

Answer: Financial aid employees at Western University do not receive compensation from Brazos Higher Education Authority. Financial aid employees (and o ther employees of the University) are subject to the University s conflict of interest policy, which requires that all decisions be made solely on the basis of a desire to promote the best interests of the University. Employees are required to disclose the existence of any conflict of interest and are prohibited from participating in decisions which are affected by the conflict of interest. However, the conflict of interest policy does not prohibit employees from receiving benefits of nominal value.

Does Western University of Health Sciences receive revenues from their School as Lender program?

Answer: Yes. Any revenues received by the University that are in excess of the cost of making the loans are used by the University to make need based grants to its students.

Does Western University of Health Sciences permit students to borrow from lenders o ther than the University?

Answer: Western University of Health Sciences permits its students to obtain loans from any lender of the student s choice. Regardless of lender, all loans are processed in a timely manner.

Other Questions

Does Western University of Health Sciences accept professional services or professional staff from lenders to assist in the daily processes of the Financial Aid Office?

Answer: No.

Do any of Western University of Health Sciences financial aid staff receive compensation for participating on any lender advisory boards?

Answer: Financial aid employees at Western University do not receive compensation for participating on any lender advisory boards. Financial aid employees (and o ther employees of the University) are subject to the University s conflict of interest policy, which requires that all decisions be made solely on the basis of a desire to promote the best interests of the University. Employees are required to disclose the existence of any conflict of interest and are prohibited from participating in decisions which are affected by the conflict of interest. However, the conflict of interest policy does not prohibit employees from receiving benefits of nominal value.

Does Western University of Health Sciences participate in any opportunity loans with lenders?

Answer: No.