WASHINGTON, DC – House Majority Leader Steny H. Hoyer (MD) released the following statement on the “Student Loan Sunshine Act of 2007" (H.R. 890), which will be considered on the House Floor today:
“College affordability is one of the most important issues facing students and American families today, and thus recent revelations about a wide range of inappropriate – and perhaps illegal – conduct within the higher education community and the failure to perform effective oversight of the student loan industry by the Department of Education are extremely disturbing and demand immediate action.
“The bipartisan ‘Student Loan Sunshine Act,’ introduced by Chairman George Miller, is an important first step in ensuring transparency and integrity in this multi-billion-dollar-a-year industry and assuring students and taxpayers that they are not being bilked by unscrupulous behavior. Among other things, this bill will require institutions and lenders to adopt strict codes of conduct; ban all gifts between lenders and schools; require institutions to disclose all relationships with lenders; require financial aid officers to exercise a duty of care and loyalty when creating a ‘preferred lender list’; and ensure that students have access to all lenders.
“As the New York Times pointed out in an editorial yesterday: ‘[T]he Department of Education, which is supposed to oversee lenders, was virtually taken over by the companies it was supposed to regulate. . . . [O]ne well-connected company was allowed to keep $278 million in subsidies after the department’s inspector general found them improper.’
“At a time of skyrocketing tuition costs and increasing dependence on student loans to finance a college education, House Democrats are determined to root out inappropriate behavior and ensure that students and taxpayers are getting their money’s worth through the student loan program. When Education Secretary Spellings testifies tomorrow before the Committee on Labor and Education tomorrow, it is imperative that she explain how she and Department intend to address these issues.”