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New York takes lead by passing law to address conflicts of interest in student loan industry
By Surajit Sen Sharma

Governor Eliot Spitzer signed the landmark Student Lending Accountability, Transparency and Enforcement (SLATE) Act of 2007, on May 30. With the signing of this law, New York becomes the first state in the country to offer pro-active legislation addressing abuses in the student loan industry. The Student Lending, Accountability, Transparency and Enforcement Act:

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; and,
Dictates strict criteria that schools must abide by if they continue to use "preferred lender" practices.

Attorney General Cuomo, at whose request the SLATE was passed unanimously by the legislature, said, "The passage of this first-of-its-kind legislation demonstrates New York's growing legacy as a national leader in creating effective, progressive, high impact laws that not only move the state, but the entire nation forward."

The SLATE is a result of the investigation Cuomo started under Governor Spitzer, when Spitzer was the Attorney General. Cuomo applauded the Governor for signing into law the protection needed by New York students and their families. The Governor thanked Cuomo for his tireless investigation and his role in championing the legislation.

Posted on: 06/04/2007 12:10 AM | Number of feedback 0

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