This week, legislation was passed in New York that will protect college students and their families from conflicts of interest regarding student lending. Initiated by New York State Attorney General Andrew M. Cuomo, the Student Lending Accountability, Transparency, and Enforcement (SLATE) Act of 2007 will provide a solution to recent scandals that have affected students and families across the country.
According to Higher Education Washington, Inc.'s NewsLine, the SLATE legislation "addresses problems exposed as a result of the Attorney General's ongoing investigation into the widespread conflicts of interest throughout the…industry." This legislation has been approved by members of New York's congress who hope it will serve as a precedent for other states attempting to end dishonest alliances between schools and certain lending companies.
According to a press release from Attorney General Cuomo's office, the Student Lending, Accountability, Transparency, and Enforcement Act (SLATE):
Prohibits lenders from making gifts—including the practice of revenue sharing—to colleges and universities or their employees in exchange for any advantage in loan activities.
Bans colleges and universities from soliciting, accepting, or receiving any gifts whatsoever—including those construed as part of a revenue-sharing practice—from lenders in exchange for advantageous loan consideration.
Bars college and university employees from receiving any advantage, reimbursement, or benefit from serving as a member of a lender's advisory board.
Prohibits lender employees and agents from posing as college or university employees, including staffing the school's financial aid offices with lender employees.
Bans lenders and schools from agreeing to certain quid-pro-quo high-risk loans that prejudice other borrowers or potential borrowers.
Prohibits schools from linking or directing potential borrowers to any electronic master promissory note or other loan agreement that does not allow students to enter a lender code or name for any lender offering the relevant loan at that guaranty agency.
Attorney General Cuomo said, "While my investigation into the $85 billion-a-year college loan industry expands, I applaud the Legislature for committing to ensure that New York's college-bound students are protected as they finance their education. New Yorkers will have the confidence in knowing that state law will be on their side when dealing with the college loan industry. The passage of this landmark legislation underscores New York government's legacy of putting forth progressive, effective legislation and leading the nation by example."
Article Title : New York Legislature Endoreses SLATE Act
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