Student Loans

Taking up an issue that could resonate with young voters, Sen. Chris Dodd’s (D-Conn.) presidential campaign blasted the Education Department for allowing student loan recipients to over-pay the loans and not get the money back. In a sharply worded statement Monday, Dodd pounced on a Washington Post article from Saturday in which Secretary of Education Margaret Spellings admitted that her department "had some responsibility" for "confusion" over regulations that allowed the excess payments to occur.

"At a time when it's clear… more

University of Miami officials have confirmed they sent students' private data to lender Sallie Mae last summer, even though students said they never applied for a federal loan from the company.

In the school's view, students did apply for a loan when they filled out the standard form all students submit to establish eligibility, financial aid director James Bauer said.

But national experts scoffed at that interpretation of federal privacy and lending laws, saying receipt of the Free Application for Federal… more

Congress approved a $20.2 billion boost in financial aid for college students yesterday, a package that backers said would be the single largest increase in federal tuition funding since World War II.

The bill, which President Bush is expected to sign, raises the maximum Pell grant for low-income students from $4,050 to $5,400, and temporarily slashes interest rates on student loans by half.

It also establishes debt-forgiveness programs for graduates who enter certain poorly paid fields such as law… more

A state agency broke federal regulations when it received millions of dollars in improper payments from companies that make student loans and offered colleges enticements to promote those lenders, according to a national report released yesterday.

Amid the massive student loan scandal, U.S. Sen. Edward Kennedy made public a committee report criticizing a deal between two lenders, Sallie Mae and Nelnet, and the New Jersey Higher Education Student Assistance Authority. The report also unveiled more marketing misconduct among colleges, lenders… more

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… more

...In a statement, First Marblehead confirmed that it had received a subpoena related to its role in the student lending industry. ''We plan to cooperate fully with the attorney general's information requests,'' the company said.

While Mr. Meyers said he was unaware of any specific investigation, he defended First Marblehead's practices, including the expanding trade in so-called direct-to-consumer, or D.T.C., loans that are made over the Internet. ''Any implication that the company… more

Nebraska’s attorney general, Jon Bruning, attacked his counterpart in New York on Tuesday over his investigation of Nelnet, a student-loan company based in Lincoln, Neb.

In an interview with the Omaha World-Herald, Mr. Bruning called the New York attorney general Andrew M. Cuomo’s investigation of Nelnet and other student-loan companies “ridiculous” and “political.” Mr. Cuomo expanded his investigation last week to include alleged improper ties between lenders and 40 athletics departments.

Mr. Bruning has himself come under fire in connection with Nelnet.… more

LINCOLN — The offers clogged Keith Hester's mailbox, promises of the cheapest way to consolidate his student loans mixed in with the usual magazine subscriptions and electric bills.Hester looked at many of them, searching for the best company with which to pay off the $42,000 he borrowed before graduating from the University of Nebraska-Lincoln in 2006.He came to an unexpected conclusion: It didn't really matter which lender he chose."None really beat the federal government,"… more

The federal Department of Education, after months of criticism for lax oversight of the student loan program, still has no system to detect and uncover misconduct by lenders and protect student borrowers, a new government report said yesterday.The report, by the Government Accountability Office and released by Congressional Democrats, found that the department had “no oversight tools” to see whether lenders were giving improper incentives to colleges to steer student borrowers their way, and, that since 1989, the… more

Crocodile tears are streaming down K Street and up Capitol Hill from bankers crying about the student loan subsidy rates Congress is poised to cut.But think tanks, the Congressional Budget Office and lawmakers such as Rep. Tom Petri (R-Wis.) say lenders' complaints are a diversion to keep Congress from truly cutting into the profits of the $85 billion student-lending industry.The federal government guarantees banks, private lenders and Sallie Mae a profit on every student loan originated… more