The White House and the Department of Education have also proposed changes on student loans that would set new standards for universities and ban lenders' marketing practices that have resulted in some payoffs to university officials.
The 225 page report on the US department of education student loan places emphasis on more aggressive policing of the $85 billion student loan industry. The new policy comes in the wake of efforts by different states to promote more ethical practices in the disbursal of student loans.
The proposed regulation will cover only federally guaranteed loans. A guaranteed student loan is a loan given to a student but which the Government guarantees. In a guaranteed student loan plan, the government is responsible for payments on the student loan. So, if a student fails to make the payments than the Government need to pay the lending agency the amount of the student loan.
The proposed regulation identifies specific practices in student loan disbursal that will be barred. This includes "offering, directly or indirectly, any points, premiums, payments or other benefits to any school or other party to secure" student loan volume in the federally guaranteed loan program. According to the new regulation, lenders who offered inducements would run the risk of losing the federal guarantee on student loan amount.
The House has already passed a version of the Student Loan Sunshine Act, and the Senate is expected to include similar restrictions on lender-college relationships in the Higher Education Act.
In the meantime, New York State has already passed legislation that governs student loan lenders. It was the first state to do so. The Loan of Conduct that now governs student loan disbursal in this state bans colleges from receiving anything valuable from a student loan company including all expenses paid trips to exotic foreign locations. Student loan officers also cannot accept anything of value for serving on a lender's advisory board.
The need to draft a code of conduct for alternative student loan became essential because of the high competition between different student loan lenders. A lot of lending agencies were offering incentives to educational institutions so that they can be on the preferred list and gain an advantage on student loan disbursal.
The new rules on student loan announced will be published in the Federal Register and is also available on the Department of Education website.
For more resources about Loan consolidation or even about School loan consolidation and especially about Student loan please review these links.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
What affect does a default on a USA mortgage have ...
By: occasions | 19-10-2007
What affect does a default on a USA mortgage have on UK credit rating, if any? RW
How bad does a foreclosure on a income property ...
By: billdo | 13-10-2007
how bad does a foreclosure on a income property affect my credit and how long before my credit will begin to reset?
I have an outstanding payday loan and my job was ...
By: jazzie | 09-08-2007
i have an outstanding payday loan and my job was called and then someone called said they was an officer and left a message and said that i am a fraud and the police was coming to arrest me for fraudulent activities and then i called them and they said that a case being filed against me for fraud and that a case is pending now i am in jepeorday of loosing my job can they do this
Where in the bible does it talk against going to ...
By: musician901 | 26-07-2007
Where in the bible does it talk against going to loan companies?
Website for US entrepreneurs
By: clavin.newman | 24-03-2007
Is there a website for the United States that is like Kiva for the developing world?
Q&A Powered by:
Latest Business Articles
Starting Up Your New Business in Tough Economic Times
By: Susan L Reid | 13/10/2008
Credit lockdown and a gloomy economy are putting a squeeze on small businesses, but don't rule out starting yours up. Instead, get creative. Put together a cost-friendly start-up by thinking beyond traditional ways of purchasing office equipment and supplies, steering clear of money-draining investments, and researching diligently. Check out these 8 tips to start up your business outside the traditional way of doing things.
Ebay Auction Search Secrets: Get An Unfair Advantage Over Your Competition With These Secrets
By: Brad Traynham | 13/10/2008
It is not easy making a living on eBay. It requires you to sell almost all of the items you list on eBay. The easiest way to do this is get more quality traffic to your auctions. The more traffic to your auction, the more bids you will get...
Self-Dumping Hopper Attachment For Forklifts
By: Camille Howe | 13/10/2008
Self dumping hoppers are designed to fit both standard mast and extendable reach forklifts. Each unit features a pocket base that can accommodate forks up to 10" wide and 2 ½" thick. Easy Rack self-dumping hoppers are construction grade devices designed to withstand continual wear and tear in a fast-paced,...
Warehouse Industrial Jib Boom Fork Truck Attachment
By: Camille Howe | 13/10/2008
Forklift jib boom attachments are much less expensive than jib cranes and can perform almost all of the same tasks at a fraction of the cost and with less heavy equipment on premises. Forklift jibs allow you to reach over obstructions to place heavy loads on roofs, elevated platforms, and...
Getting Unstuck: Tips for Overcoming "decision Gridlock"
By: Adele Sommers | 13/10/2008
Have you ever felt so stymied by your choices that every time you stared down at your "chessboard of life," you weren't sure where you could possibly make a move? Whether that feeling of being "stuck" relates to your business, personal matters, or both, it can serve to encumber your progress. This article discusses two patterns of "decision gridlock," and what to do about them.
Leadership Lessons From the Kings of Chocolate
By: Denise Ryan | 13/10/2008
Leaderships tips from two great businessmen, Milton Hershey and Forrest Mars.
Why Some Franchise Businesses Fail
By: Matthew Franchise Anderson | 13/10/2008
The concept of franchising is in itself a sound business idea. Many have become rich because of it. However, not all franchise businesses become a success story. There are several factors that may contribute to the problem.
Some franchise units, although parented by large corporations, failed to make the mark due...
Mistakes New Entrepreneurs Should Avoid When Starting A Home Based Business
By: Kanaga Siva | 13/10/2008
Success and Failure are part and parcel of life. Success in a Home Based Business can never be guaranteed by anyone. Many factors come into play if success has to be achieved. When starting a home based business it is wise to act smart and learn from the mistakes other...
More from Groshan Fabiola
How Does a Cheap Web Site Development Services Company Help?
By: Groshan Fabiola | 06/10/2008 | Web Design
A Reliable and Cheap Web Site Development Services Company assists you to become entrepreneur in the true sense. If you are lucky and have found a Cheap Web Site Design Services Company that latest online business solutions consider yourself lucky
Budget Trophies and Certificates for Corporate Awards
By: Groshan Fabiola | 06/10/2008 | Team Building
As a corporate executive of a company, you would like to motivate your employees into performing better
Beginner's Guide to Corporate Awards
By: Groshan Fabiola | 06/10/2008 | Human Resources
Every big company has their own ways of maintaining harmony and morale amongst its employees, making sure that they are as productive as possible
Are You Interested in Personal Training & Looking for a Personal Trainer in Toronto?
By: Groshan Fabiola | 06/10/2008 | Men's Health
This article is for people who want to start personal training in Toronto and who are looking for a personal trainer in Toronto who will help them to get into shape
Selecting the Ideal Pneumatic Wheels for Your Needs
By: Groshan Fabiola | 06/10/2008 | Tools and Equipment
Castors come in many shapes and sizes. Choosing the right wheels for you depends on what type of things you will be transporting and on what type of terrain. It is important to take these things into account because choosing the wrong type of wheels may either destroy your flooring, or excessively rough terrain may destroy your wheels
Dealing With the Threat of an Sql Injection Attack
By: Groshan Fabiola | 06/10/2008 | Security
One of the biggest security issues present in ASP and PHP is the SQL injection. The thing with ASP and PHP is that they have flaws that let web developers make unintentional mistakes in creating SQL queries, leading to vulnerabilities in security
What is a Tenant Loan?
By: Groshan Fabiola | 30/09/2008 | Loans
Homeowners have many advantages compared to non-homeowners. One of the main advantages is that because they own a home of their own, they have an asset that they can use as collateral should they wish to apply for a loan
Identity Management Business U.k
By: Groshan Fabiola | 30/09/2008 | Management
Let us get a fair and clear idea about what identity management is all about. Identity management is an administration related work, where key responsibility area of the team is to identify individuals in a system from a country or a network or an enterprise, and then keep a watch on their activities and control their access to resources within the system by associating user rights and restrictions, with the established identity
Business 
| Posted: 22-06-2007 | Comments: 
