Students stand to gain a lot from federal student aid legislation in Congress, but lenders have assembled an arsenal of PR campaigns, lobbyists, and campaign contributions.
Banks and loan corporations have quietly declared war on students this year, using an arsenal of more than two dozen lobbyists, an ambitious public relations campaign, and millions of dollars to kill legislation that would make college more affordable.
Lenders seem to be terrified of the Student Aid and Fiscal Responsibility Act (SAFRA), a bill in Congress that seeks to reform federal student loan policies by putting lending power and oversight into the hands of the government through the exising Direct Lending Program and ending the tax-subsidized Federal Family Education Loan (FFEL) program. By saving money through the elimination of a private middle man in lending to students, the proposal would free more funds for improving college access and completion rates. The bill that the House of Representatives passed in September is supported by the Obama Administration, and is expected to be addressed in the Senate following the health care debate.
The student loan industry, led by lenders like Sallie Mae and Nelnet, which have posted increased stock earnings on Wall Street, is doing everything it can to stop such reform. In October, SAFRA opponents introduced a website called Protect Student Choice, a public relations campaign run by Qorvis Communications, a Washington D.C. lobbying firm specializing in “corporate communications on national and international levels,” according to the company’s website.
[Read more at Truthout]