The prohibitions are similar to restrictions in legislation that Kennedy and Miller are pushing. The lawmakers introduced their legislation before Cuomo’s investigation made headlines this month; the measure has gained momentum in light of the investigation.

McKeon recently said the Democratic bill was a good starting point. Through spokesman Steve Forde, McKeon said he plans to introduce his own bill.

Forde said McKeon believes the Democratic bill is too heavy-handed in trying to clamp down on private loans. Such loans operate outside federal programs and usually are more expensive than the federal ones.

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One of the main programs relies on banks to make loans; in the other, the government lends students money directly.

Students typically rely on these programs, particularly the bank-based one. Private loans have grown more popular in recent years and now account for an estimated 20 percent of all student loan volume.

The Education Department also is working to address the relationship between lenders and student aid offices. One idea could require schools to have at least three lenders on any preferred lender list.

Sallie Mae would opposes that step, company spokesman Tom Joyce said.

“We think those decisions should be made at the school level, not by bureaucrats in Washington,” Joyce said. Lenders, he added, sometimes give students lower rates when loan volume is high at their schools.

Education Secretary Margaret Spellings recently asked a member of a panel providing advice on the department’s student loan rule-making to step down. Cuomo’s investigation indicated that Johns Hopkins loan officer Ellen Frishberg received consulting fees and had her graduate school tuition paid by Student Loan Xpress.

Spellings also placed a department official, Matteo Fontana, on leave after it was disclosed that while overseeing the loan industry, he owned at least $100,000 of stock in the former parent company of Student Loan Xpress.

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Fontana previously worked in the student lending industry, as did many others in the department.

That makes it all the more important that Congress take the lead in addressing the problems highlighted by Cuomo’s investigation, said Nassirian.

The legislation that emerges probably will become part of a higher education bill that Congress is expected to pass this year.

The Associated Press and Reuters contributed to this report.

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