Inside the Student Loan Scandal

Jennifer S. Pae is the president of the United States Student Association, the country’s oldest and largest national student association representing millions of students across the country in the Capitol, the White House, and the Department of Education. Jennifer recently ended her term as the primary student negotiator for the student loan committee for the Department of Education.

Right now, a corrupt college official and student loan lender may be purchasing a round of mojitos with your student loan check. Unfortunately, we have come to learn through Attorney General Cuomo’s recent investigations that this is not as absurd as it may sound.

Deceitful student loan practices have festered for years without federal oversight. Now that widespread corruption has been revealed, college students and their families must increase the pressure on Congress and the U.S. Department of Education to restore integrity to the nation’s higher education system.

Recently, Education Secretary Spellings testified before the House Education Committee and, once again, students are left behind in the debate over regulation and enforcement of the growing problems within the student loan industry. Chairman Miller grilled Secretary Spellings on the lack of enforcement by the Department with the student loan industry for unethical behaviors. While the Secretary explained that the “hurdle is too high” for enforcement due to unclear regulations and claimed that she was already taking large strides in oversight.

She also referred to negotiated rulemaking of the student loan committee during her testimony, which in my belief, did not serve to make her statement any more credible. After serving on the committee with lenders, guaranty agencies, and financial aid institutions, I have come to learn the ins and outs of the student loan system more than any average student would willingly go through. After months of discussions, debates, and “tentative agreements” we have nothing to show for a process that was intended to serve the best interest of students due to the Department’s unwillingness to continue negotiations. Instead, a task force has now been created without any student input that will only re-hash what we’ve already determined - A web of deceit continues to be prevalent in university student loan offices across the country.

We have had a long history of working with the Department and with members of Congress to ensure that higher education is accessible and affordable for more than 50 years. As the oldest national student advocacy group in the country, we were there when the Department was first established, we were there when many of the programs that are fundamental in higher education were created, and we will continue to be a force at the ballot box and hold our elected officials accountable to the issues that we, as young people, care about. We have already seen presidential candidates such as John Edwards take a stand and we know that many others will follow suit in what is a pressing issue for not only students, but the success of our country. College students are a strong voting force, shattering previous voter turn out records during the last two election cycles and we will now use that power to institute change.

As the U.S. Student Association is celebrating our 60th anniversary, we continue the fight to ensure that every qualified individual has a right to education. Students are contacting their member of Congress to urge the renewal of the Higher Education Act (HEA) and to make college affordable and accessible for all students.

HEA is a crucial piece of legislation usually re-authorized every 5 years, but for almost a decade, Congress has failed to renew HEA. During that time, less grant aid is now available for hardworking students, 2/3rds of the 15 million students in higher education graduate with high levels of unmanageable debt, and lenders and institutions have grown closer relationships at the expense of students.

Let’s increase the pressure on Congress so that there’s less pressure on our pocketbooks and academic lives. It is in the best interest of students, and in the best interest of our nation to make sure that our higher education system is one that is fair and just. The Department of Education and members of Congress have a responsibility to do just that.