The Consumer Bankers Association, the Education Finance Council, the National Council of Higher Education Loan Programs, the National Association of Student Financial Aid Administrators, the Institute for College Access and Success and the U.S. Public Interest Research Group are urging the U.S. Senate to include student loan related-language in the Restoring American Financial Stability Act of 2010 (S.3217).

The language would require providers of non-federal student loans to get colleges’ approval before they make such loans to students. The intention is to assure that borrowers turn to more-expensive private loans only after they have exhausted federal, state, and institutional grants or at least less costly federal student loans.

The provision would mimic similar language passed in December by the U.S. House of Representatives in the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173), which included a provision (Sec. 4818) that would require private educational lenders to obtain institutional certification prior to making loans to students.