Consumer Law

Credit Crisis Amnesia - Student Loan Version

By Alan White

In the early 1990s, Republicans and Democrats joined forces to crack down on federal loan backing for abusive for-profit trade schools, who were largely responsible for rapidly escalating student loan defaults in the 80s.  The 1992 Higher Education Act amendments and subsequent regulations tightened eligibilty rules for schools and students, and since then, the Education Department has kept a wary eye on the for-profit school sector. 

Now, having forgotten that history, a new bipartisan group of House members is trying to prevent the Education Department from protecting student borrowers and taxpayer money.  The Department is proposing to impose rather modest standards for graduate employment and loan repayment rates at for-profit schools, and the lawmakers want to block those rules from going into effect.  The for-profit schools and universities are lavishing lawmakers with lucre to persuade them to keep the student loan taps open. 

Full post as published by CL&P Blog on February 17, 2011 (boomark / email).