U.S. Student Loan Scandals
Recently, a number of scandals in the student-loan industry have hit the front page in the United States. This controversy has led to some top university officials being fired, legal settlements, policy changes and the U.S. House of Representatives have passed the Student Loan Sunshine Act which would put an end to unethical lending practices.
The video is from the Ed Labor Democrats, "Rep. George Miller, chairman of the U.S. House Education and Labor Committee, makes an opening statement at a committee hearing on unethical practices and conflicts of interest in the student loan industry and federal Reading First program on May 10, 2007."
Here are a few of the student loan violations:
1.) Preferred Lender Lists- Universities offered students a preferred lender list. In most cases, this list was not comprehensive but rather a short list of lenders that the University had "special" arrangements with.
2.) Revenue Sharing- A percentage of the loan revenue was given to the University.
3.) Inducements to Individual Financial Aid Officers- The loan companies offered expensive meals, trips, and honorarium for serving on advisory boards. In some cases, financial aid officers held stock in lending companies.








