Congress enacts sweeping changes in financial aid
This part of the legislation expressly prohibits University employees from accepting gifts from lending institutions and imposes a number of measures designed to make the lending process as honest and fair as possible.
Preferred lender lists, while not explicitly forbidden by the new legislation, must now meet rigorous guidelines to ensure that they are constructed with student's best interests in mind and without any ulterior motives. Schools with preferred lender lists must now fully disclose the basis for these preferences based on pre-set criteria under the Transparency Act.
Immediately after details surrounding Frishberg's conflicts of interest with Hopkins own list of preferred lenders surfaced, Hopkins abolished this list entirely.
"One important change that did occur as a result was the elimination of any type of preferred status with the University for lenders who provided student loans. This also included any type of preferred lender list that may have been maintained in the past," Amoroso said.
In addition, the bill includes measures such as 30-day "grace period" after a loan has been approved during which a student can review all relevant information and a three day period immediately following the signing of the loan where a student can back out with no penalty.
Amoroso stressed that these were extra safeguards to ensure that student can make the best, most informed decision.
"[This law] giving students up to 30 days after approval of a loan to accept its terms and conditions and up to three days to back out after signing loan agreements will help to provide consumer protection for student borrowers," he said.
"Since private loans are usually the most expensive to borrow in terms of fees and interest rates, these provisions will help students have a little?time to decide if they made a good choice."
Reynolds explained that the legislation focuses directly on student lending practices rather than on institutions.
Preferred lender lists, while not explicitly forbidden by the new legislation, must now meet rigorous guidelines to ensure that they are constructed with student's best interests in mind and without any ulterior motives. Schools with preferred lender lists must now fully disclose the basis for these preferences based on pre-set criteria under the Transparency Act.
Immediately after details surrounding Frishberg's conflicts of interest with Hopkins own list of preferred lenders surfaced, Hopkins abolished this list entirely.
"One important change that did occur as a result was the elimination of any type of preferred status with the University for lenders who provided student loans. This also included any type of preferred lender list that may have been maintained in the past," Amoroso said.
In addition, the bill includes measures such as 30-day "grace period" after a loan has been approved during which a student can review all relevant information and a three day period immediately following the signing of the loan where a student can back out with no penalty.
Amoroso stressed that these were extra safeguards to ensure that student can make the best, most informed decision.
"[This law] giving students up to 30 days after approval of a loan to accept its terms and conditions and up to three days to back out after signing loan agreements will help to provide consumer protection for student borrowers," he said.
"Since private loans are usually the most expensive to borrow in terms of fees and interest rates, these provisions will help students have a little?time to decide if they made a good choice."
Reynolds explained that the legislation focuses directly on student lending practices rather than on institutions.
Viewing Comments 1 - 3 of 3
credit card merchant account
posted 2/19/09 @ 2:05 PM EST
Frankly, it doesn't really surprise me. This kind of attitude is the most frequent one. I believe that it will take a long time to these people to realize that what they are doing isn't right at all. (Continued…)
Anna Reed
posted 3/11/09 @ 4:10 AM EST
That looks like lots of fun. When I was in college we didn't had so many fun activities.
Susan Goatman
posted 3/15/09 @ 3:00 AM EST
Thank you for writing the article, I am very pleased with how it came out.
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