Wednesday, March 07, 2007

9.5% Loophole Rises Again

Today a bunch of democratic lawmakers sent a strongly worded letter
to the department of Ed asking for more details about "the egregious misuse of a 1980 provision in the HEA by Nelnet, Inc., one of the nation's largest student loan lenders, resulting in hundreds of millions of dollars in overpayments to Nelnet by the federal government."

Apparently Spellings' department settled with Nelnet (and allowed it to keep $278 million in overpayments) without looking into exploitation of the loophole by other lenders, which has been going on for 10 years (!).

Oversight is good, but some actual ass-kicking would be even better.

ps. New York Times weighs in. "Advocates for students hope the letters may be the first step in a broader review of the loan industry, and hailed the pressure on the department."

No comments: