NAICU Washington Update

Federal Reserve Announces Rule-making on Student Loan Sunshine Provisions

March 30, 2009

The Federal Reserve System has issued a notice of proposed rule-making  on student loan sunshine provisions for private student loans.  The notice, issued March 25. deals with the conflict-of-interest provisions of private student loans in the Higher Education Opportunity Act, passed last August, growing out of then-New York Governor Andrew Cuomo's focus on the relationship between colleges and lenders two years ago.

The regulations are available on line in the Federal Register.  The regulations are very thorough, but the definition used for "private loan" excludes only HEA Title IV loans - encompassing both institutional loans and other federal loans such as those by the Department of Health and Human Service.  NAICU is seeking further clarification on the effect of these regulations.

Currently, the Department of Education is also conducting negotiated rule-making sessions on the federal student loan sunshine provisions affecting Title IV student loans.  NAICU is participating in those deliberations as well.