Colleges and Lenders MUST abide by new Codes of Conduct
The U.S. House Wednesday 5/9/2007 overwhelmingly passed a bill
that cracks down on conflicts of interest in the $85 Billion
student loan market.
Adopted by a 414-3 vote, the bill would require colleges and lenders
to abide by new codes of conduct…
- ban gifts from lenders to college aid officers
- require disclosure of college-lender relationships
- protect students from aggressive marketing practices.
Investigations by Congress and New York Attorney General Andrew Cuomo
have accused lending institutions of providing pay and perks to
college financial aid officers in return for being put on
“preferred lender” lists shown to students looking to borrow.
House Speaker Nancy Pelosi said in a statement that
“Corrupt practices among lenders, schools, and public officials have
undermined our student loan programs,” calling the bill a needed action
to clean up the student loan industry.
Facing the world’s highest tuition fees, U.S. university students
increasingly borrow money for their education. Typical undergraduates
leave school today…
Owing around $20,000!
My daughter owes $23,635.13 in student loans so far, still has at least
1 more year to go, and just borrowed another $5,338 for summer school.
That’s $28,973 so far. Plus, she still has another year to go,
plus she has to go to grad school for at least another 2 years.
If she keeps borrowing at the same rate over the next 3 years,
she’ll owe $57,946 in student loans.
$57,946 would make a nice down payment on a house!
For many U.S. students and their families, college costs are a worry
at this time of year with college admission letters arriving in the mail
and aid application deadlines nearing and scholarship deadlines passed.
Under the bill, “preferred lender” lists would not be banned but would
be more tightly regulated. Students will have access to lenders not on
the lists, as well.
House Education Committee Chairman George Miller told reporters after
the vote that the bill will help restore student loan ethics.
The Bill is called — The Student Loan Sunshine Act –
Edward Kennedy, chairman of the Senate Education Committee, said there is
bipartisan agreement on a Senate package of student loan industry reforms
that he expects to include in an upcoming Higher Education Act
reauthorization bill.
“These reforms will include many of the measures included in the version
of the Sunshine Act I introduced in February, including a ban on lender
gifts, reform of ‘preferred lender lists,’ and disclosures to make …
Education loans more transparent,” Senator Kennedy said in a statement.
Some congressional Democrats want further reforms, including a measure
to channel more students into direct government loans and away from
federally guaranteed loans.
But this effort faces stiff opposition and threatens the business models
of major student lenders such as Sallie Mae , Citigroup, Wells Fargo,
Wachovia, Bank of America and JPMorgan Chase.
Why borrow so much money? Earn as you learn and stay out of debt…
www.MoneyPlus2000.com
Andrew Cuomo, Attorney General, Bank of America, Citigroup, Edward Kennedy, Higher Education Act, House Speaker, JPMorgan Chase, Nancy Pelosi, Sallie Mae, Senate Education Committee, The Student Loan Sunshine Act, U.S. House, Wachovia, Wells Fargo
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