The Student Loan Sunshine Act
Democratic Lawmakers Seek to Put a Stop to Unethical College Loan Lending PracticesStudent Loan Sunshine Act Requires Full Disclosure of Lender Relationships with Colleges and Universities, Bans Lender GiftsÃ‚Â
Wednesday, February 7, 2007Ã‚Â
WASHINGTON, DC -- Democratic lawmakers in the U.S. House of Representatives are seeking to put a stop to unethical measures taken by private lenders to curry favor with colleges and universities - measures that can ultimately decrease student and parent borrowers' choices in how to pay for college.
Recent news reports have shown that private lenders sometimes offer gifts or other questionable incentives to colleges that agree to encourage students to take out their education loans with those specific lenders. The Student Loan Sunshine Act, introduced in the House today by U.S. Reps. George Miller (D-CA), Ruben Hinojosa (D-TX), Tim Bishop (D-NY), Joe Courtney (D-CT), and John Yarmuth (D-KY), would ban gifts from lenders to college employees and would require lenders to disclose the terms of their arrangements with colleges and universities. Senators Edward M. Kennedy (D-MA) and Dick Durbin (D-IL) recently introduced a companion bill in the Senate.
"At a time when more and more students and families are relying on loans - and incurring greater amounts of debt - in order to pay for a college education, it is beyond shameful that some private lenders are courting colleges with gifts and incentives that often do not help students or parents," said Miller, the chairman of the Education and Labor Committee. "These unethical practices abuse the trust that students and parents place in schools and lenders when they take out a loan, and undermine the credibility of the student aid system. Students should be steered towards lenders that will give them the best terms, not towards companies that send college employees on an all-expenses-paid Caribbean vacation."