Financial Aid Accountability and Transparency Act of 2007 - Amends the Higher Education Act of 1965 to prohibit an institution of higher education (IHE) from recommending student loan providers unless it has a formal written recommendation policy, publicizes such policy, and recommends a minimum of three unaffiliated lenders. Requires IHEs to disclose to students: (1) that they cannot limit students to recommended lenders and must process the loan documents of any eligible lender; (2) the maximum federal grant and loan aid available; and (3) the cost of attendance.
Directs the Secretary of Education to develop and prescribe an easy-to-read model disclosure form for use by IHEs and lenders in providing relevant and specified minimum information to students concerning the terms of federal and private student loans.
Requires IHEs to develop, publicize, and enforce codes of conduct for their employees, trustees, and directors prohibiting the acceptance of certain financial benefits or fees from student loan providers or guarantors. Bans IHEs from: (1) entering into educational loan arrangements that involve lender payments for recommended lender status; or (2) requesting or accepting lender assistance with call center or financial aid office staffing.
Amends the Truth in Lending Act to require private educational loan providers to inform consumers, before such loans are executed, that they may qualify for federal educational assistance, that federal student loans may have more beneficial terms than private loans, and that they may obtain additional information concerning such assistance from the Department of Education's website.