Late yesterday afternoon, the Senate rejected a House-sponsored amendment to the financial regulatory reform bill currently being negotiated in a bicameral conference committee that would have mandated school certification on all private student loans.

"The Senate cannot accept this provision," said Senate Banking Chairman Christopher Dodd (D-CT). Dodd pointed to other "strong protections" for private student loan borrowers included in the financial reform bill such as new Consumer Financial Protection Bureau (CFPB) oversight of private education loans, a new private student loan ombudsman to assist students who need help with their private loans, and a new mandated study on the private student loan industry.

"The Senate cannot agree to a mandatory certification," Dodd continued. "I authored self-certification with Senator Shelby ... and it's far too early in our view to make a judgment if we need something more."

Senator Dodd's remarks are available for viewing online (skip to 2:20:15 for his comments on self-certification).

Nearly every stakeholder involved in private education loans supports full school certification, which makes the Senates rejection of the House supported provision perplexing. NASFAA worked with students, consumer groups, lenders, and servicers to push for mandatory school certification.

Conferees will continue to meet this week in hopes of wrapping up negotiations by Thursday so it can be passed by Congress prior to the July 4 Congressional recess and possibly signed by the President prior to his departure for the upcoming G-20 summit.

Media Coverage

Congress Sprints for Wall Street Reform Finish (Reuters)

Posted 06/23/10 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit website questions or comments to Web@NASFAA.org.