WASHINGTON, D.C. – Representative Edward J. Markey (D-MA) today joined a majority in the House of Representatives to approve the Student Loan Sunshine Act, bipartisan legislation to clean up the relationships between student lenders and colleges. With evidence mounting of conflicts of interest and other unethical practices in the student loan industry, this bill is urgently needed to better protect students and families from abuses within the student aid system.
Rep. Markey said, “As the cost of a college education has skyrocketed in recent years, American students and their families have taken on enormous amounts of debt. It is unconscionable for lenders and colleges to engage in bribery or other corrupt practices at the expense of these hardworking students and their parents. I am proud to support this legislation to end those practices and help restore the trust that students and families should have in our federal student aid programs.”

Investigations at the federal and state level by news organizations over the last several months have highlighted a number of unethical practices in the student loan industry, such as lenders offering gifts or other inducements to college financial aid offices in exchange for higher loan volumes.

House Democrats first introduced H.R. 890, the Student Loan Sunshine Act, in February and are currently conducting investigations into the conflicts of interest and relationships among lenders, schools, and public officials responsible for running federal student aid programs. Expanded to fully address the egregious practices that had been unearthed since the bill was first introduced, the Sunshine Act passed the House today by a vote of 414-3.

H.R. 890 would prevent these practices in the future by taking the following steps:

o Requiring institutions and lenders to adopt strict codes of conduct that adhere to specific guidelines;
o Banning all gifts, participation on advisory boards, and risk-sharing agreements between lenders and schools;
o Requiring institutions to disclose all relationships with lenders;
o Only allowing “preferred lender lists” on campuses with strict assurances that the list was created with the students’ best interest in mind;
o Ensuring that students have access to all lenders of their choice, including those not on the preferred lender lists;
o Banning staffing of school financial aid offices by lenders;
o Ensuring that schools process all loans, from any lender, and do not steer students away from their first choice;
o Giving students full and fair information when taking out and repaying loans; and
o Protecting students from aggressive marketing practices.