Bill limiting power on student loans is rejected - East Valley Tribune: East Valley Education News

Bill limiting power on student loans is rejected

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Posted: Friday, March 9, 2007 5:55 am | Updated: 8:03 pm, Fri Oct 7, 2011.

Senate lawmakers on Thursday narrowly rejected a measure limiting Gov. Janet Napolitano’s power to choose which organizations can issue state-authorized low-interest student loans.

SB1611 failed to get the 16 votes needed but will be brought back for another vote on Monday. Sen. Karen Johnson, R-Mesa, who had voted against the bill, asked that it be reconsidered.

The measure would create a nine-member commission to decide which firms could issue the hundreds of millions of dollars in low-interest loans.

Members selected by the House speaker, the Senate president and the governor would sit on the newly formed commission.

Right now, the governor has sole authority to decide which firms can receive the special designation, but there is little oversight regarding performance of the companies.

Questions surrounding the issue were raised late last year after a Tribune article detailed that Napolitano signed an order in 2004 giving the state’s sole authority to a newly formed corporation operated by her longtime political backers — the current and former heads of the Phoenix Firefighters Union.

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