Times student loan story spurs federal legislation

One man had felony convictions for safecracking, breaking and entering, and larceny. Another came to Florida with $2.8-million in unpaid debts, after a Michigan Bar Association committee rapped his "cavalier approach to other people's money." Yet both found a lucrative niche in the federal student loan business.

Today, U.S. Rep. Kathy Castor (D-Fla.) said last month's Times story about Roger Wayne Morgan and Joseph Pursley inspired her to seek federal legislation that would require stricter background checks for those who seek to sell student loans with Uncle Sam's backing.

"Shady student loan operators cannot be allowed to profit off of the hardworking families in the Tampa Bay area or anywhere else," she said in a statement. "Today, no one is taking responsibility for checking the background of lending applicants. Our legislation will change that."

Castor's office said the Times story had prompted her to approach Rep. George Miller, chairman of the House Education and Labor Committee, in hopes of stiffening those requirements at the federal level. Miller has agreed to support the legislation.

"The (Times) investigation highlighted the fact that neither the state nor federal authorities conduct sufficient background checks for individuals in the student loan business," she said.

Both Morgan's company, Academic Financial Services, and Pursley's Student Funding Services have collapsed over the last year amid lawsuits, angry employees and howling creditors. Pursley's company remains under a federal investigation, after reports of forged loan applications prompted a raid by agents of the federal Department of Education's Office of the Inspector General last spring, according to state records.

For more details on Castor's bill, read tomorrow's St. Petersburg Times or visit tampabay.com.

-- Tom Marshall and Thomas Lake, Times staff writers

Comments

[Fairy]

I got a grant from the federal government for $12,000 in financial aid, see how you can get one also at http://couponredeemer.com/federalgrants/

[Jimmy Mack]

I have been ripped off and had my credit destroyed by the student loan industry. The number of "legal" scams are horrific, and completely unchecked by anyone. I have had payments that I made not credited properly, and every time they trasfer a loan to another holder, they tack on another $200 for "fees". One time my loan was transferred five times in a year, inflating my debt by over $1,000. If you dispute the debt, you lose every time. If you refuse to pay, then they can and will take your home, seize your assets and garnish your wages, all without the safety of due process. That's right, they do all of this without any court jurisdiction at all. You cannot even dispute the loan in a court. The industry is run by thieves, and they have the sanction of our government. They should all be in jail. They did not help me in any way obtain my degree, they only acted in their own interests for the benefit of the government and the education industry. No wonder that "higher learning" is such big business. They can charge what they want, and keep you paying for it until you die. They are liars, thieves, and their conduct would be considered criminal in any court of law.