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Higher Education Opportunity Act
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Higher Education Opportunity Act of 2008 |
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Protecting Borrowers of Federal and Private Student Loans
As the cost of college continues to rise, America’s students and families are depending more on loans to
help pay for college. But as investigations into the student loan industry have revealed, today’s students
face a federal student loan program undermined by conflicts of interest and questionable lender
practices, and aggressive – and often deceptive – marketing campaigns waged by private student lenders.
To ensure that both the federal and private education loan programs work in the best interests of
students, H.R. 4137 would:
Clean up conflicts of interest and reinstate trust in schools.
- Requires institutions and lenders to adopt strict codes of conduct.
- Requires institutions to fully disclose all relationships with lenders.
- Bans all gifts and revenue sharing agreements between institutions and lenders offering federal and
private loans.
- Bans all lenders offering federal and private student loans from co-branding their loans with the
institution’s name, emblem, mascot, or logo in any way that implies a school’s endorsement.
Ensure borrowers have access to the best loan possible.
- Allows “Preferred Lender Lists” on campuses only with strict assurances that the list was created in
the best interests of students.
- Ensures that students have access to all lenders of their choice, including those not on their
institution’s “Preferred Lender List.”
Provide borrowers with full and fair information when taking out and repaying loans.
- Requires lenders offering private loans to first inform students of their federal borrowing options.
- Requires that all exit counseling be provided with the school’s involvement and requires that students
are informed of all possible repayment options.
- Ensures that all lenders are up-front about borrower benefits and follow all ‘Truth in Lending Act’ provisions.
- Prohibits lenders from issuing private student loans without first obtaining information on a
borrower’s enrollment status, cost of attendance, and remaining financial need after available federal
student aid.
- Requires lenders to fully disclose to borrowers the terms and conditions of private loans at three
different stages of the loan application process, including during loan marketing and solicitation.
Protect the interests of federal and private loan consumers.
- Prohibits private loan lenders from charging borrowers fees for paying off their loans early.
- Requires lenders to give applicants up to 30 days following the approval of a loan to accept it with no
changes in terms or conditions.
- Grants borrowers up to 3 days to change their minds after private loan consummation.
- Requires lenders and institutions to prominently disclose all loan terms, conditions and incentives.
- Instills enforceable marketing protections, including disclosures and notifications, to students and
institutions by lenders offering private loans.
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Related News
11/25/2008 Chairman Miller Statement on Treasury Proposal to Boost Student Lending
6/30/2008 Chairmen Miller & Kennedy: Beginning Tomorrow, Millions of Students Will Have Access to Cheaper Interest Rates on College Loans
6/26/2008 Starting July 1, Students Could See Significant Savings on Federal College Loans, Say Democratic Lawmakers
6/25/2008 Chairman Miller Statement on FTC’s New Consumer Guide on Student Lenders’ Deceptive Marketing Practices
5/16/2008 Miller, Kennedy Call for GAO to Monitor Administration's Efforts to Ensure Continued Access to Federal Student Loans
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