Better Late Than Never

In a piece last month, headlined “Greed in Higher Education,” I commented on the practice of kickbacks from student loan lenders to colleges and/or their financial aid officers.
I concluded by noting the U.S. Department of Education was supposed to regulate, but apparently hadn’t.
Guess what?
The department has released proposed rules for lenders and universities.
They take up 225 pages and provide “a change in direction,” according to the New York Times.
The department’s own inspector general has been calling for these changes for years, but was ignored. This is just another example of how election of a Democratic Congress, with investigative powers, is forcing reforms within the Bush administration.
Among the proposed rules:
• Universities would have to have at least three lenders on their list of recommendations to students.
• The schools would have to explain why they were making the recommendations.
• Most gifts and payments to financial aid officers would be banned.
These proposals would apply only to federally-guaranteed loans, a sizable portion of the $85-billion industry. Yes, billion.
The chief operating officer of the office of Federal Student Aid, Theresa S. Shaw, has stepped down (read pushed out).
But I’m sure she was following the policies of Education Secretary Margaret Spellings, and of the administration, that believes the loan industry should be left unregulated.
Spellings should follow in the footsteps of Shaw.