The leader of a non-profit student loan agency defended the organization before a legislative committee Tuesday in the wake of a report by Iowa’s Attorney General. Attorney General Tom Miller told lawmakers the Iowa Student Loan Liquidity Corporation lost sight of its mission in marketing private loans over lower cost federal loans.
"Something else became more important and that was the entity itself and the growth of the entity and the market share and competing with others that give the loans so that the students, while still important, became secondary in some of the practices," Miller says.
Senator Mike Connolly, a Democrat from Dubuque, also accused the agency of worrying more about increasing the market share than helping students. Connolly said, "If you want to be in the private business go private, but this is for students this is for families in need – and I think you’ve totally lost focus."
Iowa Student Loan president Steve McCullough says they did not put the organization before the students. "I can assure you that we’ve had the best interests of students at heart and we’ve tried to do the best we can and even the Attorney General in his report recognizes that we’ve done some amazing things to help students," McCullough says.
McCullough says some parents prefer to take out private loans that they can turn over to their children upon graduation. McCullough says what the outside expert said was that there was no evidence that Iowa Student Loan in fact tried to market their loans in front of the other loans — the criticism was he felt they didn’t do enough to warn students not to do it.
McCullough promised to follow the Attorney General’s recommendations for changes. McCollough spoke directly to Connolly to say "it is our goal to engender your trust, the trust of this committee, the trust of the Attorney General and the trust of the people of Iowa, and we will do what we need to do, so that happens." Members of the legislative oversight committee told McCollough the organization would have to make changes, or they would impose new government oversight on the agency.