Culver signs student loan protection bill
Associated Press
DES MOINES, Iowa (AP) - Gov. Chet Culver on Monday signed into law a measure tightening protections for students getting college loans and ensuring that there's no sweetheart arrangement between lenders and college financial aid officials.
Culver signed the measure at Iowa State University, where students graduate with the heaviest debt load of the state's three public universities.
"Today we took another important step in helping our young people achieve their hopes and dreams of going to college," Culver said in a statement issued as he signed the measure. "This is a great example of what can happen when we put partisan politics aside and focus on what's best for Iowa students and families."
The new law was sparked in part by reports in other states that lenders gave gifts to college financial aid officials who steered students to their firms. It bans lenders from offering gifts "in exchange for any advantage or consideration of its educational loan products."
Under the measure, college financial aid workers are required to tell students of all the available options for getting assistance, including private, state, local and federal loans. The state's attorney general also gets the authority to oversee the program and enforce the structures in the new law.
It also puts in place additional oversight for lenders, including requiring that the Iowa Student Loan Liquidity Corp. abide by Iowa's open meetings law. The organization is a nonprofit operation that provides about 90,000 college loans to Iowa students each year. It sells bonds to cover the loans, which are government backed.
While tuition at Iowa public universities tends to run less than comparable institutions in other states, student debt in Iowa ranks second in the nation for overall debt at graduation.
A recent report showed that last year students at the University of Iowa and University of Northern Iowa graduated with an average debt of more than $22,000. Students at ISU graduated with an average debt of more than $30,000, that report said.
About 73 percent of students at ISU took out loans, compared to 78 percent at Northern Iowa and 61 percent at the University of Iowa, the report said.
Nationally, the average debt load for graduating college students was $19,202 in 2004, the most recent year for which figures were available.
After signing the loan bill, Culver headed to Fort Dodge to sign into law a measure expanding the list of items for which money from the Veterans Trust Fund may be used. New expenditures include dental and vision care and emergency vehicle repairs.
The fund is a $5 million pot of money, with interest from that sum used for programs to aid needy veterans
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