Cuomo Touts Student Lending Reform in East Rochester ROCHESTER, NY (WXXI) - New York's attorney general was in East Rochester Monday, promoting state and federal legislation that places new rules on lenders and colleges.

AG Andrew Cuomo told a group of East Rochester High School students that the New York legislation - the Student Lending Accountability, Transparency and Enforcement Act (SLATE) - informed national legislation.

"New York passed the law. The U.S. Congress passed the same law; those protections are now nationwide. And all this happened within one year. Which is really a testament to you because it shows when it comes to protecting our young people, and protecting the investment in the future, all the politics was stripped away and people actually came together to get it done for you."

The federal legislation became effective on September 1st, as part of the federal College Opportunity and Affordability Act. It cracks down on schools creating "preferred lender" arrangements, which in the past, earned kick-backs for schools and financial aid officers. Financial aid officers are now prohibited from receiving gifts or compensation from lenders, and schools are barred from getting a cut of student loan interest. The new rules also require better disclosures to students and prohibit schools from only processing loans with preferred lenders.

SLATE passed in 2007 and was signed into law by then-governor Eliot Spitzer. That bill gave New York students a first-in-the-nation borrowing "bill of rights." Those rights include unbiased information about loans, to know what happens to a loan if its sold, to repay a loan early without penalty, and to exhaust federal options before turning to private lenders.

Credit card companies also came under fire from Cuomo. The AG said that some companies "prey" on "vulnerable" young people. He called it a "form of corruption" and hinted that he'd be announcing an initiative to stem extending credit to students later this week.

Jim Alesi, a co-sponsor of SLATE in the state senate, and Assemblyman David Koon attended the event with Cuomo. Alesi told students that he came under pressure from banks and schools when his committee was considering the bill, but didn't bend to it.

Koon was not a sponsor of the bill in the Assembly, but did vote in favor of it. He told the crowd of high school students that he and Alesi's job is to represent them - not the banks or schools - and pressed them to contact their offices if they need assistance.
© Copyright 2009, WXXI