Gordon Votes To Restore Integrity To Student Loan Program

May 9, 2007, WASHINGTON – U.S. Rep. Bart Gordon voted for legislation to prevent abuses within the financial aid system and better protect students and families who are working hard to cope with rising college costs.

“Skyrocketing college costs force many students and families to take on enormous amounts of debt in order to afford higher education,” said Gordon. “Our federal student loan programs are in place to help students and parents cope with these costs – not to help boost the profits of lenders or individuals.

“This bill will put an end to those practices and help restore students and families’ trust in the federal student aid programs. Students will reap the benefits if we ensure these programs run more efficiently.”

The Student Loan Sunshine Act was approved by the House today (May 9). The bill would restrict the relationships between educational institutions and lending companies that offer private loans to students. It also places regulations on the preferred lender lists that colleges and universities compile to assist students in finding loan companies and requires schools and lenders to provide information to students about both private and federal loans when they are considering student loan options.

The bill is a response to recent scandals about potential conflicts of interest and corrupt activities between private lenders and schools. The investigations have focused on kickbacks going to school officials in return for placing the companies on a school’s preferred lender list.

The legislation follows House actions on student loan issues earlier in the year. In January, Gordon voted for a bill to halve interest rates on student loans over the next five years.

“Student loans have enabled many students to afford higher education,” said Gordon. “By making college more affordable and making sure the financial aid system is working properly, we can put a college degree in reach of more students.”