Hopkins Aid Officer Was Paid More by Lenders Than Disclosed

By Amit R. Paley
Washington Post Staff Writer
Thursday, May 31, 2007

A former financial aid director at Johns Hopkins University who cultivated a national reputation as a stickler for ethics accepted more than $130,000 from eight lending industry companies during her tenure, twice as much money as previously disclosed, according to documents and interviews.

In 18 years at Johns Hopkins, Ellen Frishberg advised the federal government on rules for officials dealing with the student loan industry and lectured peers on the need to avoid perceived conflicts of interest. "Appearance of impropriety is as important as impropriety itself," she said in a 2000 presentation to California aid administrators.

This month, Frishberg resigned after the university concluded that she failed to comply with ethics policies by accepting $65,000 from a lending company she had urged students to use.

But her financial ties to the industry were more extensive than Hopkins or Frishberg have publicly said, amounting to at least $133,695, according to hundreds of pages of financial records, contracts and e-mails The Washington Post obtained from Senate investigators.

The portrait of Frishberg that emerges -- a savvy businesswoman who worked at home as a $200-an-hour consultant and accepted free tickets from lenders to black-tie galas -- contrasts with her public profile as a loan company critic and student advocate. Lawmakers and consumer advocates say her case illustrates a troubling overlap between the $85 billion-a-year student loan industry and some university financial aid officials whom students have relied on for impartial guidance.

As Congress and the New York attorney general began to crack down on the industry this year, Frishberg privately lamented the new scrutiny of ties between lenders and university officials.

"This is no longer the fun and games we have come to know and love," Frishberg wrote in a March e-mail to executives at Campus Direct, a lender that paid her more than $13,000.

In her first public remarks on the controversy, Frishberg said that she had worked for lending companies but that she never viewed the arrangements as conflicts of interest. She said Johns Hopkins relied on the federal government as its primary lender. And Frishberg said the companies she did recommend offered students the best deal.

"I worked tirelessly for Johns Hopkins and its students and their parents," she wrote in an e-mail to The Post. "I have been vilified, I believe unfairly, in the media. I am no longer able to serve the students, parents and this University that I devoted much of my professional career to serving."

Sen. Edward M. Kennedy (D-Mass.), chairman of the education committee, which gathered the Frishberg documents during an investigation of the student loan business, said, "This situation underscores the need for industry-wide reform, which will restore students' trust." Kennedy has sponsored legislation to prevent conflicts of interest in university aid offices, a version of which the House overwhelmingly passed this month.

Frishberg said her supervisors at Johns Hopkins, a prestigious 131-year-old Baltimore university, encouraged her consulting work and approved at least one of her contracts with a loan company.

"Sounds like a win-win for you and Hopkins," William Conley, dean of enrollment and academic services, wrote in a 2006 e-mail to Frishberg after a university attorney reviewed her $3,000 contract with Student Loan Processors Inc.

CONTINUED     1           >

© 2007 The Washington Post Company