The office of Sen. Edward M. Kennedy (D-Mass.) released a report Tuesday [September 5, 2007] that scrutinizes a batch of practices and policies that in many cases, the senator alleges, violate federal laws and regulations governing dealings between colleges and lenders. Many of the findings build on accusations and revelations that have emerged in previous months...

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“We followed the rules in place at the time, and we did so in a way that benefited students,” Martha Holler, a Sallie Mae spokeswoman, said in response to the charges leveled against the lender in Kennedy’s report.

Some lenders argued that the fact that Congress and the Education Department are now poised to change those rules and laws, in new regulatory guidance and pending amendments to the Higher Education, renders the Kennedy report unimportant. But others said the senator’s report should provide an impetus to officials at the Education Department, who have asserted on multiple occasions that they have been unable to uncover or prosecute much in the way of meaningful inducements in the federal student loan programs.

“I don’t think there are any excuses left for the department to not look into this,” said Stephen Burd, a senior research fellow at the New America Foundation, which itself has investigated wrongdoing in the loan programs. “This report seems to lay out the case and provide really strong evidence that there were quid pro quo arrangements and that laws were violated. It should provide the department with what it has needed to prove that laws were violated.”

This excerpt is from Inside Higher Ed. For the complete article, please click on this link.