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Student loan news and the
“Student Loan Sunshine Act” legislation
What does it mean for trustees?


A still-unfolding news story, the student loan scandal has ricocheted from a handful of campuses to private lending institutions to the U.S. Department of Education and now to Congress. Complexities abound. How should trustees and institutions respond?

Listed below is a series of links to vital information concerning the student loan crisis that includes key news roundups, the link to the legislation in question, and a concise AGB analysis of what the passage of the Student Loan Sunshine Act—now in Senate committee after having passed in the House of Representatives—would mean for individual trustees, boards in general, and the way institutions conduct business. A list of discussion points/questions for board members also is included.

AGBAlert (June 8, 2007) outlines the possible impacts on boards and their institutions of the Student Loan Sunshine Act (H.R. 890) currently before the Senate Committee on Health, Education, Labor, and Pensions.

Discussion points and questions for boards

  • Does the institution have “preferential” relationships with student loan providers? If so, how were these relationships established and by what criteria were providers selected?
  • Are students informed of the diversity of student loan providers when they seek information and services?
  • Since students’ families often take on the responsibility—financial and otherwise—for student loans, what types of information and services are made available to those families?
  • Have your institution’s procedures for administering student loans recently been audited?
  • Does the institution have a code of conduct for financial aid staff? (See below for links to Cuomo’s Code and NAASFA’s updated code). Have all board members declared any investments in or relationships with student loan providers that do business with the institution?

Related links

Student Loan Sunshine Act (H.R. 890)
The full text of the bill under consideration

Summary: H.R. 890—110th Congress (2007): Student Loan Sunshine Act
Tracking information on H.R. 890, including current status, votes, and overview on sponsors and schedules, from GovTrack.us (database of federal legislation

News articles on the student loan scandals and pending legislation

House Passes Student Loan Sunshine Act
May 15, 2007 article on the bill from the National Association of College and University Business Officers (NACUBO)

Cuomo Takes Aim at Federal Regulators and Education Department in Senate Hearing on Student-Loan Scandal
Chronicle of Higher Education’s June 7, 2007 news roundup

The Selling of Student Loans: How 20 years of lenders’ marketing strategies, from free toasters to kickbacks, gave birth to a scandal
Chronicle of Higher Education’s June 1, 2007 news roundup

U.S. Puts Limits on Loan Industry’s Ties to Universities
New York Times, June 2, 2007

Presidents and the Student Loan Mess
Inside Higher Ed’s May 5, 2007 story by Robert Maurer on what presidents need to know

Background

New York State Attorney General Andrew Cuomo’s College Loan Code of Conduct

NASFAA’s Statement of Ethical Principles and Code of Conduct for Institutional Financial Aid Professionals
Revised statement from the National Association of Student Financial Aid Administrators

 

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In the wake of student-loan scandals that have affected several colleges and universities, Congress is moving rapidly to reform the student-loan industry—and there’s good news and bad news.