Culver signs student loan protections
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DES MOINES — Gov. Chet Culver signed legislation Monday to help make the student loan process more transparent for Iowa college students and provide more oversight for lenders.
Lawmakers moved to approve the measure as the average debt load has climbed for Iowa students.
“Today, we took another important step in helping our young people achieve their hopes and dreams of going to college,” Culver said in a statement released after he signed the bill at Iowa State University. “This is a great example of what can happen when we put partisan politics aside and focus on what’s best for Iowa students and families.”
The bill also provides protections for students and prohibits profit-sharing agreements between lenders and schools as well as gifts intended to encourage the use of a particular lender.
Under the legislation, the state superintendent of banking would oversee the secondary student loan market and perform an annual review to make sure lenders are in compliance.
The Iowa Attorney General’s Office is looking into the private student loan sector and is expected to present lawmakers with findings in October.
Specifically, they’re reviewing the financial practices and products of Iowa Student Loan Liquidity Corp. and have retained a national expert on the issue to assist them, said Bob Brammer, a spokesman for the office.
Rep. Vicki Lensing, D-Iowa City, one of the bill’s main sponsors, said the legislation is a good first step in helping students understand the types of federal loans that are available to them.
“I think we all believe that what we want for students is the best deal for them as they go forward in higher education,” Lensing said.
Charlotte Eby can be contacted at (515) 243-0138 or chareby@aol.com.
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