May 18, 2007
House Panel Interrogates Spellings on Student Loans and Reading Program
Members of Congress grilled U.S. Secretary of Education Margaret Spellings at a two-hour hearing last week about what they described as the department's weak oversight of the student-loan industry.
Federal law prohibits lenders from offering "points, premiums, payments, or other inducements" to borrowers or colleges to secure loan applications or increase loan volume. Lenders who violate the ban can be kicked out of the guaranteed-loan program.
But the department has taken legal
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