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Washington, D.C. - Rep. Berman today joined a majority in the House of Representatives to approve the Student Loan Sunshine Act, bipartisan legislation that would clean up the relationships between student lenders and colleges. With evidence mounting of conflicts of interest and other unethical practices in the student loan industry, Rep. Berman said today that this bill was urgently needed to better protect students who are working hard to pay for college from abuses within the student aid system.
"Many students and their families take on enormous debt to afford college." said Berman. "Federal student loan programs are in place to help students and parents pay for college - not to help boost the profits of lenders. This bill will put an end to corrupt practices and help restore the trust that students and families should have in the federal student aid programs."
Investigations at the federal and state level and by news organizations over the last several months have highlighted a number of unethical practices in the student loan industry, such as lenders offering gifts or other inducements to college financial aid offices in exchange for higher loan volume.
House Democrats first introduced the Student Loan Sunshine Act in February, and are currently conducting investigations into the conflicts of interest and relationships among lenders, schools, and public officials responsible for running federal student aid programs. The legislation passed by the House today was expanded to fully address the egregious practices that had been unearthed since the Sunshine Act was first introduced.
The Student Loan Sunshine Act would prevent these practices in the future by taking the following steps, among others:
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Requiring institutions and lenders to adopt strict codes of conduct that adhere to specific guidelines;
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Banning all gifts, participation on advisory boards, and risk-sharing agreements between lenders and schools;
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Requiring institutions to disclose all relationships with lenders;
Only allowing "preferred lender lists" on campuses with strict assurances that the list was created with the studentsˇ¦ best interest in mind;
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Ensuring that students have access to all lenders of their choice, including those not on the preferred lender lists;
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Banning staffing of school financial aid offices by lenders;
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Ensuring that schools process all loans, from any lender, and do not steer students away from their first choice;
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Giving students full and fair information when taking out and repaying loans; and
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Protecting students from aggressive marketing practices.
For more information on the Student Loan Sunshine Act, click here. |
