My sources have sent on to me a “confidential” document from Senator Ted Kennedy’s office, which includes a 21-page new bill called “The Student Loan Sunshine Act. ” This bill seeks to increase the accountability of lenders to students, and reduce any possible ethical problems created by gift-giving. The person who sent the email summarized the content of the bill as such:
This second draft will prohibit any lender from giving any form of gift, whether it be a small gift of a pen or popcorn, transportation, dinner, etc. to any college or university. In addition, it would prohibit any college or university from using their logo, letterhead or any other college communication that a college offers a loan, when in effect, the lender is offering the loan. They have added strict accountability measures to the Dept. of Ed, mandating a hearing for failure to provide this information. And, in addition, Financial aid offices would have to report which lenders they have agreements with, and the rationale for these agreements.
The idea here appears to be to increase accountability of lenders by asking them to prove that they are benefitting borrowers by (presumably) offering them a fair interest rate for their loans. Another aspect of the bill will help reduce contract steering between educational institutions and lenders, so that all lenders, big and small, have the opportunity to provide loans to students in a more free-market competitive manner.
We’ll be keeping our eyes peeled and our sunglasses ready for the upcoming appearance of the “Student Loan Sunshine Act.” The future’s looking so bright, I gotta wear shades.