(Statehouse) April 27, 2007-Representative Bob Cherry (R-Greenfield) and Representative Peggy Welch (D-Bloomington) have requested an Interim Study Committee to investigate student loan lender practices in Indiana. They hope the measure will help increase competition among student loan lenders.
"Keeping the importance of higher education in mind, it is vital that we give students the opportunity to get the best deal on student loans," said Cherry. "As we all know, college is not cheap. The money that families borrow is not dischargeable in cases of bankruptcy, which make the loan a risky investment. Any way that we can help students and families get the best deal on their education is a step in the right direction."
At the onset of the 2007 legislative session, Cherry authored a bill that would have kept student loan lenders from giving gifts to universities in turn for a "preferred" lender status. The bill died before receiving a committee hearing. Cherry and Welch are hoping to revive and further study the issue in an Interim Study Committee.
"Since there is not much competition in providing student loans, people who wish to attend college are forced into paying off these loans at higher interest rates over longer periods of time," Welch said. "All of us in the Indiana General Assembly share the hope that we can provide every conceivable opportunity to pursue the dream of a college education, but many people do not have the chance because they cannot afford it. Through this committee, we want to see if there is a chance for more competition that enables students to get the assistance they need."
The issue recently gained national attention when some states began fining student loan lenders over unlawful practices. Congress is investigating the issue, but currently, the matter is unregulated on the federal level.
The Indiana General Assembly is a part-time legislature and meets on a two-year cycle, three months one year and four months the following year. Important statewide issues can be dealt with efficiently year-round through the use of the Interim Study Committees and Statutory Commissions. These two types of legislative bodies convene regularly through the remainder of the year and study key issues which could lead to possible legislation in the upcoming session.