Assemblyman Alec Brook-Krasny (D-Coney Island, Dyker Heights) announced that bipartisan legislation he supported cracking down on deceptive college loan practices was introduced in the Assembly (A.7498). The bill – which is the first state legislation in the country of its kind – was based on information uncovered by Attorney General Andrew Cuomo and has the support of the state Senate.
“This bipartisan, landmark legislation eliminates the deceptive college lending practices Attorney General Cuomo recently unearthed,” Assemblyman Brook-Krasny said. “It’s unethical for colleges to be working in cahoots with student loan providers to possibly put our young people further into debt than they need to be. The Assembly acted swiftly in addressing this serious problem.”
The measure codifies the Attorney General’s College Loan Code of Conduct, which is the basis for settlements with lenders and schools across the country. Specifically, the Student Lending, Accountability, Transparency and Enforcement Act (SLATE):
- prohibits gift-giving from lenders to colleges and universities or their employees in exchange for any advantage in loan activities and bans colleges and universities from accepting such gifts as well;
- bars college and university employees from receiving any benefit for serving on a lender’s advisory board;
- prohibits lender employees and agents from posing as college or university employees;
- bans lenders and schools from agreeing to certain quid-pro-quo, high-risk loans; and
- provides for civil penalties of up to $50,000 for lending institutions and colleges and $7,500 for employees.
Last month, Attorney General Cuomo announced he was investigating over 100 schools and more than six lenders for deceptive and sometimes illegal practices within the $85 billion per year student loan industry. Legal action has been taken against several companies thus far.
“Students should be confident that lenders and their college aren’t working together to influence the vitally important decision of deciding which company to borrow from,” Assemblyman Brook-Krasny said. “The sometimes-crushing debt students find themselves under after they graduate is a huge problem. The Assembly’s legislation will help keep the student loan industry on the up-and-up.”
The Assembly will hold a public hearing April 23 on the SLATE legislation to both end this practice and restore confidence in our higher-education system.