Senate Bill Would Exempt State Student Loans From 2007 Scandal Conflict Rules

Senate Bill Would Exempt State Student Loans From 2007 Scandal Conflict Rules

Author: The College Investor August 12, 2026 Duration: 13:50

A bill moving quietly through the Senate would let colleges steer students toward state-run and nonprofit student loans without triggering the federal conflict-of-interest rules Congress wrote after the 2007 financial aid kickback scandal.

Nearly two decades ago, investigators found that the people students trusted most to give neutral advice (their college financial aid officers) were quietly working for the other side of the table. Financial aid officers held stock in the lenders they recommended. Lenders paid schools a cut of the loan volume they steered. Some financial aid offices let lender employees answer their phones.

Because roughly 90% of families take whatever loan their school recommends, a single line on a "preferred lender" list was worth millions to a lender. It also cost borrowers real money, since the school's recommended option is not always the cheapest one.

The cleanup produced settlements, resignations, congressional hearings, and eventually a permanent set of federal rules. This proposed law would change the rules back for a small slice of the private student loan market.


Hosted by Robert Farrington, founder of The College Investor and a recognized Millennial Money Expert, The College Investor Audio Show transforms the website's most valuable insights into a daily, conversational format. This podcast directly tackles the financial hurdles unique to a generation, moving beyond theory into practical, actionable strategies. Each episode focuses on the core pillars of modern financial health: systematically eliminating student loan debt, demystifying the fundamentals of investing, and creating actionable paths to increase your income. The goal is clear: to guide you from a place of debt management to one of confident wealth building. You'll hear straightforward advice on navigating repayment plans, understanding where and how to start investing even with limited capital, and exploring side hustles or career moves that make a real difference. It’s a resource for anyone feeling stalled by their loans and eager to lay a solid foundation for their future. Tune in for a no-nonsense take on millennial money, where complex topics are broken down into manageable steps you can apply immediately.
Author: Language: English Episodes: 50

The College Investor Audio Show
Podcast Episodes
Families Spent $34,019 On College Last Year, Up 10% [not-audio_url] [/not-audio_url]

Duration: 11:29
American families spent an average of $34,019 on college during the 2025-26 academic year, a 10% increase from $30,837 the year before, according to the annual Salie Mae and Ipsos study How America Pays for College 2026.…
Trump May Forgive Upwards Of $170B In Student Loan Debt [not-audio_url] [/not-audio_url]

Duration: 10:09
When voters think of student loan forgiveness, they often picture executive actions and legal battles. Under President Biden, student loan debt relief efforts dominated headlines, particularly after the Supreme Court str…