Bill would set school code for lenders

On the heels of state Attorney General Martha Coakley's investigation into whether colleges have improper relationships with loan companies, state Senator Mark C . Montigny has introduced a measure that would ban any such relationships.

Montigny, Democrat of New Bedford, introduced an amendment to the state budget yesterday that would require all Massachusetts universities, public and private, to adhere to a code of conduct designed to prevent conflicts of interest in their dealings with lenders.

Schools would be banned from accepting anything of value from a lending institution in exchange for any advantages, such as placement on the school's "preferred lender" list.

Schools would also be required to disclose the criteria they use in deciding which loan companies get preferred status.

Montigny's proposed code of conduct is similar to a bill Democratic senators Edward M . Kennedy of Massachusetts and Richard J . Durbin of Illinois introduced in Congress in February. Attorney General Andrew Cuomo of New York has also required several universities to adopt a code of conduct as part of settlement agreements.

The Massachusetts Board of Higher Education, at the state lawmaker's request, has also agreed to consider adopting a code of conduct for public universities at the board's June 14 meeting.

"I think it is a good idea," said Patricia F. Plummer, the state's higher education chancellor.

In March, Cuomo's office singled out six Massachusetts schools for making revenue-sharing arrangements with a lender, Education Finance Partners. The schools were Bridgewater State College, Boston University, Emerson College, Berklee College of Music, Mount Holyoke College and Becker College.