WASHINGTON, D.C. - The U.S. House of Representatives on Wednesday passed a law that will require colleges and lenders to provide detailed accounts of any arrangements they might have.
The news delighted New York Attorney General Andrew Cuomo, the man who has fired the first shots on every front of what is becoming a nationwide investigation into the student loan industry.
"Elected leaders on both sides of the aisle have demonstrated a true commitment to protecting America's students and parents from deceptive practices and conflicts of interest which are rampant in the student loan industry," Cuomo said. "The New York State Legislature passed similar legislation earlier this week which, like the Sunshine Act, will help put an end to the vicious cycle of debt perpetuated by lenders and their university partners.
"Congressman George Miller's leadership on this issue has been outstanding and he should be applauded for his superb work President Bush should immediately endorse this legislation and exercise the leadership needed to get this Bill passed quickly in the Senate and signed into law."
Recently, the Slate (Student Lending Accountability, Transparency and Enforcement) Act was passed by the New York legislature. It is designed to protect college students who are prospective lendees from conflicts of interest in the student loan industry and modeled after Cuomo's College Loan Code of Conduct to which dozens of institutions have agreed.
Cuomo has bashed the federal government in the past, claiming the Department of Education does not enforce existing regulations in the student loan industry while he testified before the House Committee on Education and Labor.
Cuomo has said that his investigation has revealed inappropriate relationships between lenders and schools. He alleged that Education Finance Partners, against whom he filed his first lawsuit and with whom he recently settled, was put on schools' "preferred lender" lists because it offered a cut of its profit to those schools.
He has also settled with dozens of schools and the four largest student lenders -- Sallie Mae, Citicorp, JP Morgan Chase and Bank of America.