Someone just pointed out to me that the so-called “Student Loan Sunshine Act” will mean the financial aid representatives, the very same people currently under fire, will be instructing parents and students which private lenders they can and cannot use and how much they can borrow. That didn’t make any sense to me. Why would Senators Kennedy, Clinton, Kerry, and Rockefeller want to give more power to the same people they were just chastising?

I decided to look the bill over again. As I shifted through this very poorly worded document I found myself thinking about the administrative cost of this plan. All educational institutions receiving any federal funding or assistance will have to provide a written report on each lender they have made any student loan arrangements with. Each report will include why the institution feels the terms and conditions are in the benefit of the students for each loan type that lender is offering. That sounds like a lot of extra paperwork for an already highly bureaucratic, over worked financial aid department. Those reports would have to be given to students or their parents as well. There’s nothing like another 20 pages of complicated double talk to make the financial decisions easier, is there?

But the Sunshine Act will spread the time consuming and ultimately meaningless work around! Each lending organization will have to submit their own report on every loan arrangement and all information imaginable that is even peripherally associated with the arrangement. That includes information on marketing and endorsements. Lenders would also be limited in how they can advertise their products to students. Why would the government care how lenders advertise? There are already laws and organizations to protect consumers from false advertising. And why does the government want a report on all the minutia involved in each loan?

And who is going to go through all these reports? Don’t worry, the Sunshine Act has an answer for that one too. The Secretary will go through all the reports and then make another report to deliver to committee in the Senate and the House. Those committees will then draft another report to present to Congress. Before the Secretary’s report has time to be mulled over completely, the Secretary will submit another report explaining what changes need to be made in the formats of the reports created by the institutions and lenders for the upcoming reporting year. Is someone in the Senate getting paid every time someone says “report”?

The Sunshine Act will protect students in the end though, right? If all the reports are audited and proven to be accurate and then the reports on the reports don’t lose anything in the translation, and if borrowers can obtain, read and digest the reports before they need the loan…no, that still doesn’t really help. That just means any dishonest people will continue being dishonest, but they will have a blanket of reports to disguise themselves. A student needing financial aid for the next academic year would theoretically be able to read reports on the potential lenders that would only be 3 or 4 years out of date. Whew! It’s a shame there isn’t a financial aid office or something where experts could help them in real time.

But Senators Kennedy, Kerry, Clinton, and Rockefeller are just trying to help students, right? Oh how I wish I could say yes, but their motives are far from altruistic.

First, they get sound bites for upcoming elections so they can sound like they care about the problems of young Americans and they are doing everything within their power to help. They will be very quick to point out that the Sunshine Act was drafted to keep those evil financial aid people and those heartless lenders from bullying students into bad decisions.

Second, they create a level of administrative cost that makes offering financial loans cost prohibitive to many lenders while making it more advantageous to educational institutions to limit the number of lenders they are associated with. By signing up with the FDLP and forming alliances with only a few mega-banks, institutions will cut their reporting efforts dramatically.

Don’t be blinded by the Sunshine Act. It’s bad legislation and bad business!

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.