Student Loans: Bush Aides Derailed New Rules in 2001: problem that this year has grown into a major controversy

Warnings On Student Lenders Unheeded | Bush Aides Derailed New Rules in 2001 | By Amit R. Paley | Washington Post Staff Writer | Tuesday, May 1, 2007; Page A01

The Bush administration killed a proposal to clamp down on the student loan industry six years ago following allegations that companies sought to shower universities with financial favors to help generate business, according to documents and interviews with government officials.

The proposed policy, which Education Department officials drafted near the end of the Clinton presidency and circulated at the start of the Bush administration, represented an early, significant but ultimately abortive government response to a problem that this year has grown into a major controversy.

Now, as the $85 billion-a-year student loan industry faces an array of investigations into questionable business practices that some officials believe could have been curtailed by the 2001 proposal, ...