Congress Passes Key Legislation

Yesterday both houses of Congress passed a bill extending the Higher Education Act, which governs most of the federal government's college aid programs. We want to call your attention to two items in this lengthy legislation.

First, we're pleased that the bill includes many of the reforms called for in our Private Loan Policy Agenda: requiring key disclosures of a loan's real cost; banning deceptive branding using college names and logos; giving borrowers three days to cancel these risky loans without penalty; and more. Unfortunately, two much-needed reforms are missing. Industry pressure killed an important provision requiring lenders to make sure that colleges know when their students take out private loans. And Congress failed to eliminate unfair bankruptcy rules that leave distressed private-loan borrowers with nowhere to turn.

Second, the bill also encourages and empowers the Department of Education to simplify the FAFSA by pre-populating the form with tax data as we've proposed. It also recognizes the need for students and parents to get earlier information about their aid eligibility.

We'll continue to keep you informed about our ongoing work to strengthen borrower protections and simplify the financial aid process.

(This message was sent to the Project on Student Debt mailing list on August 1, 2008.)