HEA: Student Loan Sunshine
HEA Title I, Part E; throughout Title IV, including Section 487 (a) and (e); Title X
Quick Take:
The law imposes new restrictions on colleges and federal student loan lenders in order to prevent conflicts of interest between colleges and their responsibilities to their students. Issues addressed include "prohibited inducements" by lenders, new disclosures to borrowers, and requirements for institutional codes of conduct (for both federal and private student loans). The law also defines the requirements for preferred lender lists. Under the new law, colleges can be held liable for the actions of certain "institution-affiliated organizations," such as alumni associations and athletic booster clubs.
When Will This Take Effect?
These provisions went into effect when the bill was signed into law on August 14, 2008. Regulations issued on November 1, 2007, also continue to apply unless they were superseded by the new law (34CFR 682). Provisions regarding the code of conduct for federal student loans are subject to negotiated rulemaking. The Secretary is required to develop guidelines for disclosures and may issue regulations on other aspects of the new requirements.
Who on Campus May Need to Be Involved?
Financial aid; legal counsel; business/finance office; development office
Additional Resources
HEA101 Web Keyword for More Information: LoanSunshine