WPCNR'S ADAM IN ALBANY. By State Assemblyman Adam T. Bradley, 89th District. May 16, 2007: The student loan industry scandal – in which certain colleges and universities were found to have had inappropriate financial relationships with lenders – has put New York’s college students in jeopardy. New York Attorney General Andrew Cuomo’s ongoing investigation brought the scandal to light, revealing the increasing use of questionable practices to market private loans to students and their families.
In order to remedy the problem as quickly as possible, the Assembly and Senate recently passed legislation I sponsored to stop the student loan industry’s conflicts of interest used to steer borrowers at colleges and universities to certain lenders (A.7950). The legislation is to be known as SLATE, the Student Lending Accountability, Transparency and Enforcement Act. Some provisions of the bill include:
· prohibiting lenders from giving gifts to colleges and universities and ban colleges and universities from accepting them in exchange for any advantage in loan activities;
· barring college and university employees from receiving any compensation for serving on a lender’s advisory board;
· prohibiting lender employees and agents from posing as college or university employees;
· requiring colleges to tell inquiring students about public loans – which may be a better option – before talking to them about private loans.
Over 20 colleges and universities nationwide have signed the Attorney General’s Code of Conduct, which ensures that the relationships between schools and student loan lenders put the needs of students ahead of the needs of shareholders. A handful of schools in New York have signed onto the Code, including: New York University; Fordham University; Syracuse University; Pace University; and 29 State University of New York Campuses.
It is disappointing that colleges and universities favored certain student loan lenders for particular advantages, putting themselves first, instead of the students they purport to care about. Significant numbers of students and their parents turn to loans to help pay for college. Loans are supposed to help a student complete his or her degree to get ahead, not purposely drag them into so much debt that they can barely make a living. I am confident that the governor will sign SLATE so we can end these dubious loan practices. In this way, we can help restore trust in an education system that is supposed to support our youth, not prey on them.
