Great Job by Donald and Chap!

Providing a college education for a child who wishes to attend is one of the greatest opportunities our society can provide. Graduating from a college or university not only gives children more choices and greater earning power, but also creates better educated leaders to take our nation and our communities through the next century. Unfortunately, higher education is expensive. Even at our state schools here in Virginia, excellent academic institutions and some of the top bargains in the nation, a four year degree will probably cost well in excess of $50,000 dollars. Not surprisingly, many students and their families need financial aid and want to take advantage of student loan programs.

Furthermore, during the last decade, the cost of tuition has skyrocketed, forcing students to borrow ever larger sums. Unfortunately, over the same period, interest rates have also escalated drastically, compounding the burden on families.

Over the past year, I have been particularly disheartened to hear of the unethical and irregular behavior engaged in by some of the student loan corporations. Contrary to what many people think, many student loan programs are for profit corporations. In their eagerness to earn dollars, some unsettling practices have emerged. One of the largest, if not the largest, student loan corporation is Sallie Mae which has been in the news recently because of some of its alleged very questionable practices in its search for increasing profit.

Some schools of higher education have reportedly entered into a relationship with Sallie Mae, where the corporation planted unidentified employees inside school financial aid offices. They also allegedly wined and dined university financial aid officers to further encourage them to entice students to borrow from Sallie Mae.

Because I believe that the opportunity to get a college degree is very critical and because I was so discouraged and dismayed by these egregious lending practices, Senator Chap Petersen and I introduced a bill this year to protect our students and their families. This bill requires institutions of higher education to develop procedures about disclosing financial aid policies and report this information on an annual basis to the State Council of Higher Education for oversight. The information in the disclosure must include the status of any private lenders being used by that school, the criteria that determine which lenders, if any, are recommended to students by the university and explicit information that students can actually borrow from any lender of their choice. Finally, this bill forbids any college or university from having an exclusive relationship with a lender and also prohibits employees of the school from accepting gifts from lenders.

This is a critical first step in protecting our children and their families. While it is never easy to borrow money and to know that a student may be incurring years of debt repayment, we must at least do what we can to make certain that the student and his or her family are able to make informed knowledgeable choices.

Chap and I are pleased to announce that this bill now has passed both the House and the Senate and awaits the Governor's signature.

I would like to take this opportunity to thank Chap for working with me so that, together, we could pass this important legislation.

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